JB Chemicals - Aggressive Growth Focus In The Domestic Market, Strong Financials, Healthy FCF: Nirmal Bang

Nirmal Bang Report

We recently visited JB Chemicals and Pharmaceuticals Ltd.’s oral solid (T20) and Injectable (IV17) facilities at Panoli, Gujarat and interacted with the operation and production heads across all plants to understand the company’s manufacturing capacity and capability.

While the T20 facility is U.S. Food and Drug Administration approved and it is utilized for the U.S., South Africa and Indian markets, the IV17 facility is mainly for rest of world markets.

The company is also adding a separate eye drops line in the IV17 facility for the U.S. market and is expected to start validation batches from April 2023.

We like JB Chemicals’ idea of having a uniform production policy and almost similar compliance standard across all geographies. About capacity, as per the management, the company has sufficient capacity and expansion space in the existing plants for at least the next five years of production requirement.

On the Ranzel brand acquisition, we believe that the deal complements the company’s existing cardiac segment and the management believes that it is a strategic fit to enhance focus on the domestic market.

The company will utilise its existing fieldforce to market these brands, but we expect that JB Chemical will need to add more field strength to promote these brands.

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