Jubilant Pharmova’s December quarter results reinforce a steady growth narrative even as near-term margin pressures temper earnings momentum. Strong traction across Sterile Injectables, Drug Discovery Services, and Allergy Immunotherapy supported a healthy top-line expansion, while operational disruptions weighed on profitability. Management has reiterated its medium-term vision, anchored in capacity additions, portfolio diversification, and selective investments across high-margin businesses. ICICI Direct continues to see Jubilant Pharmova as a structurally improving pharmaceutical platform, valuing the company on a sum-of-the-parts basis and reiterating its BUY rating with a 12-month target price of Rs 1,310, offering meaningful upside from current levels.

Research House View: ICICI Direct Reaffirms BUY with Rs 1,310 Target

ICICI Direct has reaffirmed its BUY recommendation on Jubilant Pharmova, setting a target price of Rs 1,310, implying an upside potential of around 41% over the next 12 months. The brokerage continues to value the company on a sum-of-the-parts (SoTP) basis, reflecting the diversity and scalability of its underlying businesses. At the current market price near Rs 930, analysts believe the stock offers a favorable risk-reward profile, particularly for investors with a medium-term horizon.

Business Snapshot: A Diversified Pharmaceutical Platform

Jubilant Pharmova operates as an integrated pharmaceutical enterprise with a strong international footprint. Following its demerger from Jubilant Life Sciences, the company sharpened its focus on pharma-centric verticals, operating across six key segments: Radiopharmaceuticals and Radiopharmacies, Sterile Injectables (CDMO), Allergy Immunotherapy, CRDMO-APIs and Drug Discovery, Generics, and a proprietary novel drug pipeline.

The company holds a top-three position globally in radiopharmaceutical manufacturing and operates the second-largest commercial radiopharmacy network in the United States. In allergy immunotherapy, Jubilant Pharmova is the second-largest player in the US subcutaneous segment, underscoring the strategic depth of its specialty portfolio.

Q3FY26 Performance: Revenue Momentum Holds, Margins Compress

The December quarter reflected a familiar pattern: strong revenue execution paired with margin headwinds. Consolidated revenues rose 16.7% year-on-year to Rs 2,116.1 crore, driven primarily by outsized growth in CDMO Sterile Injectables, which surged 49%, alongside Drug Discovery Services and Allergy Immunotherapy, both posting 13% growth.

Other operating segments also delivered steady gains, with Radiopharmaceuticals, Radiopharmacies, and Generics expanding by 12%, 11%, and 13%, respectively. The only notable laggard was the CDMO-API business, which declined 9% year-on-year.

Despite the robust top-line, EBITDA remained flat at Rs 289 crore, as margin dilution offset revenue growth. EBITDA margins fell 214 basis points to 13.6%, reflecting lower production in the Allergy segment and operational disruptions in Sterile Injectables due to facility remediation shutdowns. Gross margins, however, remained structurally strong at approximately 66.3%, highlighting the inherent pricing power of the portfolio.

Segmental Drivers: Sterile Injectables and Discovery Lead the Cycle

ICICI Direct highlights Sterile Injectables (CDMO) and Drug Discovery Services as the company’s primary growth engines. Growth in Sterile Injectables was supported by Line-3 technology transfer programs and the resumption of production at the Montreal facility following remediation efforts.

Drug Discovery Services continued to scale, benefiting from large global pharma contracts. Management expects this business to maintain positive momentum over the medium term, supported by strong demand visibility and expanding client relationships.

Radiopharmaceuticals also returned to growth, aided by traction in Ruby-Fill, a PET radiopharmaceutical product used in cardiac imaging. However, management has cautioned that temporary supply shortages may slow growth over the next two quarters before normalization.

Investment Pipeline: Capacity Expansion and Margin Upside

Jubilant Pharmova is executing a multi-year investment program aimed at strengthening high-margin verticals. Key initiatives include the commissioning of the fourth CDMO Sterile Injectables line in Spokane, investments in six high-margin PET radiopharmacies in the US, new radiopharma launches, and the refurbishment of legacy Allergy Immunotherapy facilities.

These investments are central to management’s FY30 aspiration of doubling revenues from the FY24 base, expanding EBITDA margins to 23–25%, and delivering return on capital employed in the high teens. ICICI Direct believes execution across flagship segments will be critical in translating this vision into sustained shareholder value.

Financial Trajectory: Earnings Recovery Visible Beyond FY26

ICICI Direct’s projections indicate a steady earnings recovery after a margin-impacted FY26. Revenues are expected to rise from Rs 7,234.5 crore in FY25 to Rs 10,270.2 crore by FY28, translating into a healthy two-year CAGR of around 12%.

EBITDA is forecast to expand from Rs 1,173.7 crore in FY25 to Rs 1,771.9 crore by FY28, supported by operating leverage and normalization of plant operations. Adjusted EPS is projected to improve from Rs 30.2 in FY25 to Rs 49.8 by FY28, while return ratios gradually strengthen, with RoCE approaching 9.5% over the same period.

Valuation Framework: Sum-of-the-Parts Underpins Upside

The brokerage’s SoTP valuation assigns differentiated multiples across business segments, reflecting varying growth and risk profiles. High-margin businesses such as Radiopharmaceuticals, Drug Discovery Services, and Allergy Immunotherapy command premium EBITDA multiples, while Generics and CDMO-API are valued more conservatively.

Based on this framework, ICICI Direct arrives at an equity valuation of Rs 20,684.5 crore, translating into a per-share value of Rs 1,310. At current levels, the stock trades at FY27E EV/EBITDA of around 12.1x, which analysts view as reasonable given the company’s improving earnings mix.

Key Risks Investors Should Monitor

While the long-term narrative remains intact, ICICI Direct flags several risks. These include heightened competition or therapeutic shifts within the Radiopharma segment and adverse regulatory outcomes, particularly from the USFDA, across any of the company’s manufacturing facilities. Operational execution and regulatory compliance will remain critical variables influencing valuation re-rating.