Blue Jet Healthcare Limited

Blue Jet Healthcare reported a record-breaking Q3 FY25, with revenue reaching INR3,184 million, marking a 53% quarter-over-quarter and 91% year-over-year growth. Profit After Tax (PAT) surged to INR990 million, up 70% QoQ and 208% YoY, representing the highest ever quarterly profit. EBITDA for the quarter stood at INR1,240 million, growing 79% QoQ and 127% YoY, with an EBITDA margin of 39%. For the nine months ended December 2024, revenue from operations was INR6,895 million (up 31% YoY), EBITDA was INR2,378 million (up 35% YoY), and PAT was INR1,951 million (up 57% YoY).

The strong Q3 performance was primarily driven by new capacity additions in Unit 2, which were fully operationalized during the quarter. This included 120 KL capacity in Phase 1 for cardiovascular intermediates and an additional 37 KL capacity in Phase 2 for contrast media intermediates. Commercial production for the NCE molecule has commenced, with optimal utilization expected by H1 2026. Unit 3 at Mahad, focused on backward integration for contrast media, is now expected to go live in H2 FY26, following a redesigned process for higher quality and safety.

Recognizing innovation's critical role, Blue Jet Healthcare plans to invest INR40 crores in R&D equipment in FY26, alongside an increase in R&D operating expenses from INR5-6 crores in FY25 to INR10-12 crores in FY26. These investments will focus on developing advanced intermediates, expanding the contrast media portfolio, and enhancing CDMO capabilities for high-value projects, including amino acid derivatives for GLP-1 products. The company is building new chemistry platforms and labs for quick turnaround of RFPs for advanced intermediates.

For the nine months, the pharmaceutical intermediates category reported a significant turnover of INR2,663 million, up 352% year-over-year, driven by optimized new capacity. The contrast media segment saw a turnover of INR3,028 million, a degrowth of 17% due to past customer offtake issues, but new product launches are expected to sustain growth. The saccharin category grew 10% to INR1,038 million, with management noting its stability and niche market position, not seeing replacement by sucralose.

The company's Q3 EBITDA margin reached 39%, significantly impacting operational leverage. For the 9-month period, the EBITDA margin was 34.5%. Management indicated that with sustained turnover levels in coming quarters, they expect to benefit further from operational leverage, improving the annual EBITDA margin to 'in excess of 35%, 37%', an upward revision from the previous 30-33% range. This improvement is attributed to sales growth, expansion in EBITDA margin, and a change in depreciation method.

Working capital for the nine months increased by INR1,200 million, primarily due to higher inventory for pharmaceutical intermediates, which will be optimized over time^⏳. The company capitalized production capacities amounting to INR1,000 million during the 9-month period. Additionally, they spent INR620 million and anticipate spending an additional INR1,500 million on existing projects, mainly in Mahad, alongside the INR400 million R&D investment slated for FY26.