Jubilant Pharmova, a stock included in the portfolio of veteran investor Rakesh Jhunjhunwala, can give a return of 26 percent to investors. According to brokerage and research firm ICICI Direct, the company has entered into contract manufacturing deals regarding COVID-treatment and vaccine, which will increase its profits and may increase its share price. Earlier in the last quarter, the company’s revenue in the CDMO (Contract Development and Manufacturing Organization) segment has increased by 48 percent to Rs 574 crore on an annual basis. However, the overall revenue growth of the company remained almost flat in the last financial year.
Domestic brokerage and research firm ICICI Direct has increased the target price of Jubilant Farmova due to the growth forecast in the CDMO segment and the deal for COVID treatment and vaccine. Today on Monday, June 7, it is trading at Rs 788.50 with a fall of about 6 percent.
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3600 crore order for the company for the next three years
Jubilant Farmova reported a 23.5 per cent year-on-year decline in revenue in the radiopharma segment. According to the company’s management, there was a reduction in diagnostic testing due to the corona epidemic, due to which the revenue declined. Although the company’s allergy business has reached the level before the corona. The company’s net profit declined by 13.7 per cent to Rs 183 crore. The company’s performance in the last quarter was affected due to the decline in the radiopharma segment, but the management expects a recovery in this financial year 2021-22 due to a new launch. Jubilant Farmova says that in the CDMO segment, the company has received orders worth up to Rs 3600 crore for the next three years.
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Target price of Rs 1 thousand
ICICI Direct has fixed a target price of Rs 1,000 per share for Jubilant Farmova, which is about 26 per cent higher than its current share price. Jubilant Pharmaova comprises the therapeutics business of Jubilant Pharma, Biosys and Jubilant Life Sciences. In February 2021 this year, the company was demerged into Jubilant Ingravia and Jubilant Farmova. Big Bull Rakesh Jhunjhunwala holds 6.3 percent stake in this company and his stake in the company is about Rs 793 crore.
(Article- Kshitij Bhargava)