Hi fellow investor,
( Disclosure: I own shares of Jubilant Life Science and hence my views on the topic may be biased. Everything I conclude in the article is solely my opinion based on publicly available information. This should not be taken as financial advice. This is purely for educational purpose.)
Let’s get straight into it.
Jubilant Life Sciences is an integrated global pharmaceutical and life science company engaged in various sectors including pharmaceuticals, life science ingredients, branded pharmaceuticals and drug discovery solutions.
It operates these businesses through various subsidiaries, including-
Jubilant Pharma - This acts as their holding company for the whole pharmaceutical business which can be divided further into 3 segments,
Speciality Pharmaceuticals, that includes the Radiopharma business and their allergy therapy products,
CDMO, their contract manufacturing business of sterile injectables and non-sterile products and Active Pharmaceutical ingredients (APIs), and
Generics, that includes manufacturing and sale of Solid dosage formulations including CVS, CNS, GI, anti-inflammatory and anti-allergy categories.
Jubilant Infrastructure - It has a 256 acres chemical plant in Bharuch, Gujarat. It has 2 units, and is the largest producer of Vitamin B3 in India and 2nd largest globally.
Jubilant Biosys - It provides drug discovery services and contract research services in partnership with leading healthcare companies.
Jubilant Life Science NV- supplies bulk chemicals like ethyl acetate and vitamins in Europe.
Jubilant Life Science (USA)- Sales and Distribution of advance intermediates, vitamins, life science chemicals and fine ingredients in North America region.
In FY11 they changed their name from Jubilant Organosys to Jubilant Life Sciences and de-merged the agri and polymer business from the firm into Jubilant Industries, to focus more on speciality chemicals and pharmaceuticals.
Currently the company is looking forward to another de-merger. The company will split into two, one of the listed entities will be the pharmaceutical company ( under Jubilant Pharmova Ltd) including, the radiopharma, CDMO, generics and novel drug discovery and development segments. The other will be the Life Science Ingredient business ( under Jubilant Ingrevia) including, the Speciality Intermediates (i.e Pyridine and derivatives) , the Nutritional products (i.e Vitamin B3 ) and the Life science chemicals business ( i.e Acetyl products).
The pharmaceutical company has been the major contributor and driver of the company’s profitability over the last five or so years and this de-merger should in theory be value accretive for it, while the Life Science Chemical business is a commoditised business with much less stable margins despite the company’s dominant position in this segment. Since the de-merger is just round the corner ( by end of Jan 2021) , it makes sense to look at these as two different entities.
So Part 1 will be looking at the Pharmaceutical side-