JB Chemicals Receives Buy Rating with Target Price of ₹2,300 from Prabhudas Lilladher
Prabhudas Lilladher maintains buy rating on JB Chemicals and Pharmaceuticals with ₹2,300 target price following 16% YoY Q3FY26 EBITDA growth. The brokerage expects continued growth driven by geographical expansion, improved productivity, acquired brand scale-up, and contract manufacturing expansion. With EPS CAGR of ~22% projected over FY25-28E and margins set to improve beyond FY27E, the stock trades at attractive valuation of 25x FY28E EPS versus 30x target multiple.
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J B Chemicals and Pharmaceuticals has received a buy rating from Prabhudas Lilladher with a target price of ₹2,300 per share, following the company's strong Q3FY26 performance and positive growth outlook.
Q3FY26 Financial Performance
The company delivered robust financial results in Q3FY26, with key metrics aligning with analyst expectations:
| Metric | Q3FY26 Performance |
|---|---|
| Adjusted EBITDA Growth | 16.00% YoY |
| Performance vs Estimates | In line with expectations |
Growth Drivers and Strategic Initiatives
Prabhudas Lilladher expects JB Chemicals' growth momentum to continue, supported by multiple strategic drivers:
- Geographical expansion of legacy brands into new markets
- Improvement in medical representative productivity through enhanced sales strategies
- Scale up of acquired brands to maximize portfolio value
- Launch of new products and therapies to diversify revenue streams
- Scaling up contract manufacturing business for additional revenue growth
- Strong free cash flow generation supporting business expansion
Corporate Developments and Timeline
The management has provided clarity on key corporate transactions and expected timelines:
| Development | Timeline |
|---|---|
| Torrent Pharma Transaction Completion | Q4FY26 end |
| Merger Completion Post-Transaction | 6-9 months |
| Margin Improvement Timeline | Beyond FY27E |
Financial Projections and Valuation
The brokerage has made minor adjustments to its earnings projections while maintaining a positive outlook:
| Parameter | Details |
|---|---|
| FY27E/28E EPS Revision | Reduced marginally by 2-3% |
| Expected EPS CAGR (FY25-28E) | ~22.00% |
| Current Trading Multiple | 25x FY28E EPS |
| Target Valuation Multiple | 30x FY28E EPS |
| Target Price | ₹2,300 per share |
Margin Improvement Outlook
The research firm anticipates significant margin expansion beyond FY27E, driven by the grant of perpetual license for the acquired ophthalmic portfolio. This development is expected to enhance the company's profitability profile and strengthen its competitive position in the pharmaceutical sector.
Prabhudas Lilladher maintains its buy recommendation, citing the company's strong fundamentals, diversified growth strategy, and attractive valuation at current market price relative to the target price of ₹2,300 per share.
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