Jubilant Ingrevia Ltd., a key player in the global Life Sciences industry, has made headlines once again as its stock surged more than 6% on 04/09/2024. The jump follows Equirus Capital’s target upgrade, which now sees a 25% upside potential in the stock. But is this the right time to invest in Jubilant Ingrevia? In this blog, we’ll dive into an in-depth fundamental analysis, exploring the company’s history, current position, and future prospects.
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A Glimpse into Jubilant Ingrevia’s Legacy
With over 40 years of experience in the chemical space, Jubilant Ingrevia has established itself as a global leader, particularly in the Pyridine and Vitamin B3 markets. The company serves 15 of the top 20 global pharmaceutical companies and 7 of the top 10 agrochemical giants. From its inception in 1978, Jubilant Ingrevia has continuously evolved, expanding its portfolio to include custom research and manufacturing solutions.
Recent Performance and Equirus Capital’s Upgrade
On September 4, 2024, Jubilant Ingrevia’s stock saw a significant rise of over 6%, reaching a trading price of Rs 719. This surge came on the back of Equirus Capital’s target upgrade, which now anticipates a 25% upside potential. The firm has revised its target price upwards due to strong growth prospects, especially in the specialty chemicals and nutrition segments. The stock is currently trading at a P/E ratio of 65.8, which is relatively high, indicating market optimism about the company’s future performance.
Let’s dive into the company’s balance sheet dashboard and break it down step by step for a thorough understanding.
Financial Performance (2021-2025)
- Sales, Net Profit & Operating Profit: Jubilant Ingrevia has demonstrated steady growth in its financials. Sales have increased from Rs 684 crore in March 2021 to a predicted Rs 4,655.07 crore by March 2025. Despite a dip in net profit in 2023, the company is expected to recover, reaching Rs 201.12 crore by March 2025. Operating profits are also on the rise, with a prediction of Rs 613.35 crore in the same period.
- Earnings Per Share (EPS): EPS saw a peak of Rs 29.93 in March 2022 but dropped to Rs 11.48 in March 2024. The forecast for March 2025 suggests a modest recovery to Rs 12.62.
- Return on Equity (ROE): ROE experienced a significant drop from 19.61% in March 2022 to 6.68% in March 2024. However, predictions indicate a potential rise to 7.85% by March 2025.
Operating Profit Margin (OPM)
The Operating Profit Margin has fluctuated over the years, from 17.11% in March 2021 to a predicted 13.18% in March 2025. This trend reflects the challenges and opportunities in the company’s core business segments.
Asset and Liability Distribution
- Assets: Jubilant Ingrevia’s asset base is predominantly composed of fixed assets (Rs 2,539 crore) and other assets (Rs 1,834 crore). This strong asset base supports the company’s growth plans and operational stability.
- Liabilities: The company’s liabilities are mainly centered around healty reserve (Rs 2,722 crore) and other liabilities (Rs 1,241 crore), highlighting a balanced capital structure.
Short-Term and Long-Term Investment Outlook
Lets checkout the performance of the stock:
- Short-Term (3 Months): The stock could potentially reach Rs 790-800, given the current market momentum and favorable analyst ratings. A stop-loss should be set at Rs 690 to mitigate downside risks.
- Long-Term: Over the next 12-18 months, Jubilant Ingrevia could aim for a target price of Rs 900-950, supported by its strong fundamentals and growth prospects in the specialty chemicals and nutrition segments.
Conclusion
Jubilant Ingrevia Ltd. presents a compelling investment opportunity with its strong market position, diversified business segments, and positive growth trajectory. While the stock is currently trading at a high P/E ratio, the company’s robust fundamentals and future growth prospects make it a worthy consideration for both short-term gains and long-term investment. With the recent surge in stock price and optimistic analyst outlooks, investors should keep a close watch on Jubilant Ingrevia in the coming months.
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