J. B. Chemicals & Pharmaceuticals Limited (506943) Earnings Call Transcript
January 19, 2026
Earnings Call Speaker Segments
Ladies and gentlemen, good day, and welcome to JB Pharma's Q3 FY '26 Earnings Conference Call as on 19 January 2026. [Operator Instructions] Please note that this conference is being recorded. I now hand the conference over to Mr. Jason D’Souza, Executive Vice President at JB Pharma. Thank you, and over to you, Mr. D’Souza.
Thank you, Andrew. Welcome to the earnings call of JB Pharma. We have with us today, Nikhil Chopra, CEO and Whole Time Director; Mr. Kunal Khanna, President, Operations; Narayan Saraf, the CFO at J. B. Chemicals & Pharmaceuticals Limited. Before we begin, I would like to state that some of the statements in today's discussion may be forward-looking in nature and may involve certain risks and uncertainties. A detailed statement in this regard is available in the results presentation that has been sent to you earlier. I would like to hand over the floor to Mr. Nikhil Chopra to begin the proceedings of the call and for his opening remarks.
Jason, thank you. And I would like to welcome everyone today on the call to discuss JB Pharma's performance for Q3 FY '26. Friends, once again, we have performed well with top line revenues growing at 11% to INR 1,065 crores. Our operating EBITDA, excluding noncash ESOP, stood at INR 305 crores, up 13% whereas net profit came in at INR 198 crores, growing at 22% over the previous year. Gross margins during the quarter 3 rose by 200 bps to 69.1% as compared to 67.1% last year. This is on the backup of attractive product mix, price improvement realized and stable raw material costs. The operating EBITDA margin stood at 28.7%, higher by 60 bps year-on-year given our consistent thrust on driving profitability. Let me now draw your attention to the detailed discussions beginning with the domestic business. Our domestic business showed 10% growth year-on-year to INR 620 crores. As per IQVIA December MAT data, JB remains the fastest-growing company within the top 25 names in Indian pharma market. All of our major brands have continued to deliver and have posted strong growth. Six brands now feature in top 300 brands in the Indian pharma market. I would like to underline that we have maintained momentum as one of the fastest growing pharma companies in the country over the past several years. The domestic business franchise now has a strong foundation, which will help the business continue to grow in the future, above than the Indian pharma market growth. Turning to international operations. Quarter 3 FY '26 growth saw 12% growth year-on-year to INR 445 crores. Our international operations growth was driven by international formulation businesses which saw a revenue of INR 306 crores, up 20% year-on-year, given the strong performance in Russia, South Africa, U.S. and other branded export markets. The CDMO business has sustained its momentum and once again performed well in quarter 3 FY '26 despite a high base in quarter 3 FY '25. Our focus on cost optimization, favorable product mix and operational efficiencies led to improved operating margins for the quarter FY '26 as well as for the 9-month FY '26. JB Pharma continues to pursue growth with conviction, driving revenue expansion with a sharper focus on efficiency and organizational agility. Our sustained investments in the domestic business and CDMO platform remains central to realizing consistent growth while protecting margins. Supported by strong balance sheet and an execution-driven culture, we are well positioned to adapt to evolving market conditions and advance confidently into company's next stage of strategic development. I would like now -- I would now like to urge Mr. Narayan, our CFO, to continue with the views on the financial performance. Over to you, Narayan. Thank you.
Thank you, Nikhil. Good afternoon, everyone, and welcome to JB Pharma's Q3 FY '26 Earnings Call. Now to take you through the financial updates for the third quarter, revenues for the quarter were at INR 1,065 crores, representing an increase of 11% year-on-year. The domestic business to international business mix was 58% to 42%. In Domestic business, the domestic formulation business segment reported revenues of INR 620 crores with a 10% year-on-year growth. As per IQVIA MAT December 2025 data within the IPM, the company outperformed with a growth of 12% versus the IPM growth of 9%. In this segment, the company's franchisees results saw a growth of 11% year-on-year with revenue at INR 108 crores. In international business, the international business segment grew by 12% year-on-year with revenues at INR 445 crores. The international formulations witnessed a robust growth of 20% year-on-year to INR 306 crores, owing to the strong performance of the export business of South Africa, Russia, USA and branded exports market. The CDMO category remained nearly flat at INR 117 crores for quarter 3 FY '26. That being said, sales momentum during the quarter was sustained despite a higher base of the previous year and is expected to continue on in Q4 FY '26. The revenues from API categories were at INR 21 crores for quarter 3 FY '26. Gross profit margins expanded 200 basis points year-on-year at 69.1 percentage, increasing on the back of a better product mix, stable RM prices and positive price growth. Operating EBITDA, which is excluding the ESOP cost, was at INR 305 crores, growing 13% year-on-year. Margins expanded year-on-year at 28.7% versus 28.1% in quarter 3 FY '25. During the quarter, other income increased to INR 18 crores as against INR 8 crores in quarter 3 FY '25 due to treasury income. Depreciation increased to INR 45 crores versus INR 42 crores in quarter 3 FY '25. Net profit increased by 22% year-on-year at INR 198 crores. We reiterate our guidance for operating margins between 27% to 29% for FY '26. That brings me to the end of my opening remarks. I now request the moderator to open the forum for the Q&A session. Thank you very much.
[Operator Instructions] The first question comes from the line of Sumit Gupta from Antique.
Am I audible?
Yes.
So first question is on the domestic side, like what kind of price hikes we have taken for this quarter?
Sorry, could you repeat the question, please?
Price hikes in the domestic business for this quarter?
So if you really look at our numbers, we try to maximize the price hike. Our price hike generally for the quarter is in -- close to 7%.
Okay. And with respect to the guidance, like you used to guide a 12% to 14% kind of growth for domestic market. However, if you see in this quarter, the growth has been kind of 9% to 10% though you still maintain this 12% to 14%? Or should we revise down to around 10% to 11%?
Yes, Sumit, if you look at our growth YTD 9 months for India business, which is close to around 11%, 12%, our guidance continues to be growing better than the market 200 to 300 bps, which is in line to where we stand today, and that is how it will happen by the end of the year also.
Okay. So basically, you are expecting INR 620 crores, INR 630 crores kind of revenue for domestic to continue that -- to be continued?
So what we were talking about was our growth with respect to market. If you really look at it from a quarterly perspective, March generally is a soft month for all Indian pharmaceutical companies for domestic market situation because of the inventory closing from the distributors' end. So that quarterly run rate can be impacted because of natural March phenomenon, but overall, our growth will be higher than the industry.
Sure. And second is on the margins, like your margins have increased even though the growth has been kind of normal or slower than -- slightly slower than normal. So what is that [indiscernible]?
Sorry, your -- your voice is not clear.
Mr. Gupta, sorry for interfering. Please come next to the mic and speak.
Is this fine?
Yes, this is better.
Okay. Yes. So basically to understand on the margin side. So apart from the domestic performance, like what is like the improvement in the margin, overall performance in the margin?
So overall, if you look at the product mix, which is a combination of what we have done in India business with our chronic portfolio contributing on the higher side and our international business mix of CDMO business and what business we have done in some of the geographies that has led to better gross margins for the quarter.
Right. So we can expect this to continue. And in the international side, also South Africa and the geographies, are they doing well?
So as we see what -- as we see quarter 4, the guidance would be that we have a good order book for quarter 4. And our gross margin should reach between 60% to 69% by the end of the year.
[Operator Instructions] Next question comes from the line of [Pranik Parikh] with Shree Capital.
Congratulations on good set of numbers. I have two questions. One about the dividend policy. Is there any change in the dividend policy? There is no announcement of any interim dividend this time.
Yes. So interim dividend, we have not announced yet. However, once the right time opportunity comes, we will inform and update you about the dividends.
This question was in the context of our regular announcement of interim dividend with the second -- the December results which usually, for last 5 years, it has been regularly announced, so if there is any change?
So control situation, it will happen over time, and we'll update you once we take the decision.
All right. Secondly, about this pending merger with Torrent. Any guidance on the timeline?
It's a work in progress, and it's progressing at its -- on normal speed. And we'll keep on updating as and when we have got any fresh development.
So presently, what is likely -- I'm sorry, if you have mentioned it in the earlier calls, but just to confirm, what is the guidance on -- by when this is likely to be completed, any understanding?
So it may happen sometime in quarter 4.
[Operator Instructions] Next question comes from the line of Ananya Khanna with Alpha Alternatives.
Am I audible?
Yes.
First of all, congratulations on a good set of results. So my question to you is can we expect the merger with JB Chemicals [indiscernible] to be completed. Can you give us like a rough timeline? And also, can you shed some light [Technical Difficulty] created with the merger?
Sorry, I could not hear your last line, Ananya. What was -- your voice was cracking.
Hello, Ananya, can you repeat?
Ms. Khanna, please -- yes, your voice was breaking. Can you just repeat the question once again?
Yes. So can you give us like a rough estimate as to when the merger can be completed, the merger with JB Chemicals and can you give us a rough timeline for the same and also shed some light on the possible synergies that can be created via the merger?
So Ananya, first of all, this call is more to talk about the performance for the quarter, but as Narayan told to the previous call -- in the previous question that this is work in progress. And as and when we get more visibility, we'll be happy to share, but it will happen sometime in quarter 4.
The merger will -- so the closure is expected in quarter 4 and the merger can happen any time, 6 to 9 months from there on. That's the way to really look at the situation. At this stage, we can only...
Can you shed some light on the possible synergies that can be created via the merger?
We would not like to comment on any of the synergy situation as of now.
[Operator Instructions] Next question comes from the line of Abdulkader Puranwala with ICICI Securities.
Congratulations on a good set of numbers. My first question is pertaining to your CDMO business. So I understand there was a high base in the quarter, but then for FY '27, how should we look at the revenue run rate for this particular segment? And if you could also help us understand the utilization of the CDMO plant at what levels are they currently?
CDMO, what we shared earlier that -- this quarter was a base effect, but our run rate for the quarter -- for every quarter continues to be around INR 115 crores to INR 120 crores for this year. And you should expect us to grow at around 10% to 12% for FY '27.
Understood. And my next question is for CFO sir. So in this quarter, have we seen any impact coming from the new labor law code or are we still in the process of evaluating the impact?
No very significant. We have taken the necessary impacts in our P&L, and it was not something substantial enough.
[Operator Instructions] Next question comes from the line of Bino Pathiparampil with Elara Capital.
Just a follow-up on the merger question earlier. So you said the deal will close in Q4 and then another 6 to 9 months for the merger, is that correct?
Yes, yes.
Okay. Okay. So what is the -- why such a delay between deal closure and merger, 6 to 9 months?
So, I think that's all we'll be able to share, I think, on this call. As we said that -- that's all that we will be able to share on this call. We can focus on the performance, that will be more apt.
[Operator Instructions] Next question comes from the line of Naman Bagrecha with IIFL Capital Services Limited.
Sir, can you [indiscernible] on the growth export formulation business that we saw this...
Mr. Bagrecha, sorry for interrupting. Your sound is not clear. Can you come a little closer to the mic and speak.
Sir, can you explain or elaborate more on the export formulation business growth that we saw for this quarter? And how should one look at [indiscernible]?
So Naman, for the quarter, as I think earlier guided, quarter 3 and quarter 4, we had a good order book, which was shared in quarter 2 commentary. So that is how the quarter 3 has performed for the international markets, and that is backed up by good performance in our both subsidiaries, South Africa and Russia. Also, our export branded business has also done well. That is where we stand. And what we guide for the year is we should grow at high single digit by the end of the year, and that is what we had shared in our quarter 2 commentary in the investor call.
And sir, on the India business plan, for the first 9 months of we have grown in double digits, but the last 2 quarters including Q2, the growth has been, let's say, around 9-9.5%. Any particular slow down that you are seeing in our portfolio or in just the market terms?
No. So no real concern with the overall growth for domestic business. Our chronic portfolio has done exceedingly well. And the 1%, 1.5% difference, which we are seeing, instead of that 11% to 12% being closer to 10% is largely attributed to some slowdown for our acute business, more specifically the gastro portfolio. Apart from that, if you really look at the numbers of all our key brands and compare that with IPM, we have done exceedingly well. Just to give some numbers, Cilacar has grown at 25% plus, Cilacar-T at almost 33%. Nicardia has grown at almost 30%, Sporlac franchise showing a growth of 13%. So all our big franchise have -- franchisees have done well. It's essentially some slowdown of the acute gastro, which is showing the difference.
[Operator Instructions] The next question comes from the line of Akshaya Shinde with SMIFS Limited.
Just a follow-up on our export formulation business. Can you give more detail on like how the international markets are performance like the growth is driven by the volume or the price hike there also? That's it from my side.
So we had a good demand in our both subsidiaries in terms of volume, particularly in South Africa and Russia for the quarter. And that is what we are looking forward in quarter 4 also. And our business, if you look at our quarter 2 performance for branded generics, we were flat. But this quarter, as earlier also shared, we had a good order book, so that we could execute for quarter 3 and equally, I'm sharing at this moment of time that in quarter 4 also -- for quarter 4 also, we have a good order book where we should see double-digit growth for the quarter. But for the year, we should grow at high single digit.
Next question comes from the line of Jason D’Souza.
No, no. No, I'll just take some questions which have come on the wall. So first question is on the ophthalmology business. It seems to be that the business is just 10%. Any guidance on that?
I think we'll be double-digit growth in Opthal portfolio as well. Our chronic and glaucoma portfolio has done well. Some bit of slowdown is again attributed to the acute products. But otherwise, we are well poised to reach our aspirations of having a consistent INR 17 crores to INR 18 crores per month run rate for this portfolio in the next 3 to 4 months.
The other question is, which is there on the FY -- Q4 performance. Any guidance on how the Q4 FY '26 performance will be there?
So quarter 4, as what we have earlier shared, is India business should grow to 200 to 300 bps better than the market. And international business as we have good order book, we should show the same performance as what we have demonstrated for quarter 3, which by the end of the year should grow at high single digit. So we'll be as per what guidance we have been giving in terms of both our businesses, India as well as international market will plus show the same performance as what we have delivered in quarter 3 and margins close to around 28%.
And another question is assuming, as we said that the transaction gets closed in Q4, anything on the ESOP charge that we would like to mention?
So assuming if the change of control event happens in quarter 4, then we are clearly looking at around INR 40 crores of ESOP charge, what is balance that toward to be charged in the quarter 4.
Great. And the last question, which is there in, a significant increase in other income to INR 18 crores. Anything that you would like to highlight?
So it's basically because of the simple reason is that since we have repaid all our debt, we had some opening debt in last year. And now we have repaid all our debt, and we have got surplus cash which we're investing as per our treasury policy, and that's resulting into higher [indiscernible].
That's it from my side. Over to you, moderator.
Thank you. Ladies and gentlemen, that was the last question for today. We have reached the end of question-and-answer session. I would now like to hand the conference over to Nikhil for closing comments.
Thank you all for showing all the interest in JB Pharma's performance for the first 9 months of the year. And the guidance that we want to give for the current year is we'll continue to outperform the market in India business. All our big brands getting -- will only get bigger driven by volume growth, particularly showing good performance in the chronic space. Equally, in the international market, we have bounced back in quarter 3, and that momentum will continue in quarter 4, backed up by our subsidiaries doing better, South Africa, Russia, as well as international branded businesses also showed double-digit growth for the quarter. And we should end the year for our Industrial business at high single-digit growth. And we'll continue to maintain our EBITDA margins for the year close to 20% to 29%. And that was -- that is an echo to the guidance that we have given to all of you in our previous investor calls. Thank you all.
Thank you.
Thank you.
Thank you. On behalf of JB Pharma, that concludes this conference. Thank you for joining us. You may now disconnect your lines.
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