Mehabe score: 6 G Factor: 3 Piotski Score: 8 The stock has a rating OBSERVE & HOLD. The mehabe team score is reflective of its fundamental and technical merits. A rating above 8 is considered good buy. The stock has a G-Factor of 3 and Piotski score of 8.
Description
J.B. Chemicals and Pharmaceuticals Limited, established in 1976, is one of India’s leading pharmaceutical companies. An integrated, publicly-listed organization with a focus on supplying affordable, quality products both in India and internationally, JBCPL is trusted by healthcare professionals globally. #
Main Points
Geographical Presence
The company earns 47% of its revenues from its domestic business and the rest 53% revenue comes from international business. # The Company’s focus markets are US, Canada, Mexico, Brazil, EU, UK, Australia, and South Africa. # Its order book remains strong and South Africa and USA has been major growth drivers for the company.Site:JBCHEPHARM
Market Cap:
Rs 11,939 cr
Price:
1545.0
Trading pe:
30.0x
Book-value:
210/share
Div yield:
0.71 %
Earning yield:
4.61%
Face-value:
2.00/share
52week high:
1616.00
52week low:
656.85
Technical Analysis
Stock trades at 1545.0, above its 50dma 1390.24. It also trades above its 200dma 1127.26. The stock remains bullish on techicals
The 52 week high is at 1616.00 and the 52week low is at 656.85
Price Chart
P/E Chart
Sales and Margin
Strengths
– is almost debt free.
– has delivered good profit growth of 22.47% CAGR over last 5 years
– has been maintaining a healthy dividend payout of 21.36%
Weakness
– Stock is trading at 7.34 times its book value
-The company has delivered a poor sales growth of 9.18% over past five years.
– has a low return on equity of 12.65% for last 3 years.
Competition
– The industry trades at a mean P/E of 29.2x. Sun Pharma.Inds. trades at the industry’s max P/E of 55.95x. JBCHEPHARM trades at a P/E of 30.0x
– Industry’s mean G-Factor is 2.2 while the mean Piotski score is 8.0. JBCHEPHARM has a G-Factor of 3 and Piotski scoreof 8.
– Average 1 month return for industry is 9.1%. The max 1- month return was given by Piramal Enterp.: a return of 35.81 %
Quarterly Results
Sales for period ended Mar 2021 is Rs 528.0 cr compared to Rs 444.0 cr for period ended Mar 2020, a rise of 18.9%
Operating Profits reported at Rs 124.0 cr for period ended Mar 2021 vis-vis 92.0 for period ended Mar 2020 .
Operating Margins expanded 276.4 bps for period ended Mar 2021 vis-vis Mar 2020 .
The EPS for Mar 2021 was Rs 13.02 compared to Rs 19.94 for previous quarter ended Dec 2020 and Rs 6.49 for Mar 2020
Profit & Loss Statement
Profit&Loss Comments
Company reported sales of Rs 2043.0 cr for period ended Mar 2021 vis-vis sales of Rs 1775.0 cr for the period ended Mar 2020, a healthy growth of 13.1%. The 3 year sales cagr stood at 13.2%.
Operating margins expanded to 27.0% for period ended Mar 2021 vis-vis 21.0% for period ended Mar 2020, expansion of 600.0 bps.
Net Profit reported at Rs 448.0 cr for period ended Mar 2021 vis-vis sales of Rs 272.0 cr for the period ended Mar 2020, rising 39.3%.
Company recorded a healthy Net Profit CAGR of 48.1% over the last 3 years
Balance Sheet Statement
Cash Flow Statement
Cash Flow comments
Sales Growth
Profit Growth Statement
Profit Growth Statement
Stock Price CAGR
Return of Equity
General Comments
– The company has improved its Return on Equity (RoE) metric. The RoE on Last Year basis was 18.0% compared to 13.0% over the last 3 Years. – The stock has given a return of 123% on a 1 Year basis vis-vis a return of 76% over the last 3 Years. – The compounded sales growth on a TTM bassis is 12% vis-vis a compounded sales growth of 10% over the last 3 Years. – The compounded profit growth on a TTM basis is 48% vis-vis a compounded profit growth of 20% over the last 3 Years.
Ratios
Shareholding Pattern
– FII shareholding has remained largely constant. The Mar 2021 fii holding stood at 7.54% vis-vis 7.87% for Dec 2020 – Public shareholding has remained largely constant. The Mar 2021 public holding stood at 23.38% vis-vis 22.31% for Dec 2020
Conclusion
– is almost debt free.
– has delivered good profit growth of 22.47% CAGR over last 5 years
– has been maintaining a healthy dividend payout of 21.36% – Stock is trading at 7.34 times its book value
-The company has delivered a poor sales growth of 9.18% over past five years.
– has a low return on equity of 12.65% for last 3 years.
Fundamentally, the stock remains weak on business fundamentals. Weak near term results have dampened and questioned business drivers. We suggest to wait for a upturn in business performance.
Technically, the stock trades above its 50 DMA 1390.24 and is trading at 1545.0 It has shown near term bullish momentum contrary to business fundamentals. We suggest to observe price action. However as investors, who like to avoid timing the markets, we suggest to avoid the stock
