JB Chemicals & Pharmaceuticals Limited

J.B. Chemicals & Pharmaceuticals Limited reported robust financial results for Q3 FY26, with top line revenues growing 11% year-on-year to INR1,065 crore. Operating EBITDA, excluding noncash ESOP, increased by 13% to INR305 crore, while net profit saw a significant rise of 22% to INR198 crore. This strong performance was underpinned by a 200 bps expansion in gross margins to 69.1%, attributed to an attractive product mix, realized price improvements, and stable raw material costs. The operating EBITDA margin also improved by 60 bps year-on-year, reaching 28.7%.

The domestic business segment demonstrated strong growth, achieving a 10% year-on-year increase to INR620 crore. According to IQVIA December MAT data, J.B. Pharma remains the fastest-growing company within the top 25 Indian pharma companies, outperforming the IPM growth of 9% with a 12% growth. The company's major brands continued to deliver strong growth, with six brands now featuring in the top 300 brands in the Indian pharma market. Management noted that the chronic portfolio contributed significantly to this growth, while some slowdown was observed in the acute gastro portfolio.

International operations grew 12% year-on-year to INR445 crore in Q3 FY26. This growth was primarily driven by the international formulation businesses, which saw a 20% year-on-year revenue increase to INR306 crore. Strong performance was observed in key markets such as Russia, South Africa, and the U.S., as well as other branded export markets. The company expects to maintain this momentum, with a good order book for Q4, aiming for high single-digit growth for the full year in international markets.

The CDMO business maintained its momentum, though it remained nearly flat at INR117 crore in Q3 FY26, which was attributed to a high base in the prior year. Despite this, the company's focus on cost optimization, favorable product mix, and operational efficiencies led to improved operating margins for the segment. For FY27, the company expects the CDMO business to grow at a rate of 10% to 12%, with a consistent quarterly run rate of INR115 crore to INR120 crore for the current year.

The company has successfully repaid all its debt, which was a key focus from the previous year. This debt repayment has resulted in the company holding surplus cash. This surplus cash is now being strategically invested as per the company's treasury policy, leading to a significant increase in other income. Other income for the quarter rose to INR18 crore, compared to INR8 crore in Q3 FY25, reflecting the positive impact of the improved liquidity position.

The proposed merger with Torrent is currently a work in progress, proceeding at a normal pace. Management indicated that the closure of the merger is expected in Q4 FY26, with the integration process potentially taking an additional 6 to 9 months thereafter. The company reiterated its FY26 operating margin guidance of 27% to 29% and expects to continue outperforming the market in India while achieving high single-digit growth in international markets for the full year.

The ophthalmology portfolio is expected to achieve double-digit growth. Management is poised to reach a consistent monthly run rate of INR17 crore to INR18 crore for this portfolio within the next 3 to 4 months. This focus on the ophthalmology segment is part of the company's strategy to drive growth and expand its presence in specialized therapeutic areas, complementing its strong chronic portfolio.