Hold Jubilant Ingrevia; target of Rs 649: Prabhudas Lilladher

What happened

Prabhudas Lilladher kept a HOLD rating on Jubilant Ingrevia with a target price of Rs 649. The company reported consolidated revenue of INR13.9bn, up 24.4% year on year, while price pressure in Pyridine and Picoline weighed on profitability.

Confirmed

Global impact / market context

The HOLD rating signals the broker sees limited upside at the current price, even after strong revenue growth. Profit pressure in Pyridine and Picoline, which are chemical products, means sales growth may not translate into proportionally higher profit for investors.

Analyst inference

The stock trades at 23 times FY28E EPS, which means 23 times estimated profit per share for that year. The Rs 649 target also implies 23 times Sep'28E P/E, so the broker's valuation rests on future earnings growth actually arriving.

Analyst inference

What to watch

1. Clarity on the large agro CDMO contract is expected over the next few weeks. CDMO means contract development and manufacturing, where the company makes products for other firms. Confirmed
2. The company has a pipeline of 25 or more confirmed molecules, excluding the large agro CDMO contract, with peak revenue potential of about INR15bn, of which at least one-third is expected in FY27. Confirmed
3. Watch whether Pyridine and Picoline price pressure eases, because continued declines could keep profit per sale, that is EBITDAM, under strain even as revenue grows. Analyst inference

Evidence

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