Rakesh Jhunjhunwala-owned Jubilant Ingrevia’s share value has soared a huge 180% so far in 2021, assisting the huge bull huge returns from the life-sciences components business. The sturdy rally seen by the sock could continue additional, analysts at HDFC Securities think. The domestic brokerage and study firm initiated the coverage of the stock with a ‘buy’ rating seeing at least 12% upside from today’s opening value to hit a target of 844 per share.. Rakesh Jhunjhunwala, along with his wife, Rekha Jhunjhunwala owns more than 1 crore equity shares of the business, which was earlier recognized as Jubilant Lifescience.
Jubilant Ingrevia was formed immediately after Jubilant Lifescience got the NCLT approval for its demerger strategy of possessing two separate entities for pharma and LSI (Life Science Ingredients) enterprises. The de-merged entity, Jubilant Ingrevia has 3 verticals, Speciality Chemicals, Nutrition and Health Solutions, and Life Science Chemicals. During the preceding monetary year, Life Science Chemicals enterprise income grew by 13% although that of Nutrition and Health Solution grew 17% on-year basis.
Stong upside anticipated
The business operates in a sector with higher entry barriers on account of in depth R&D focus and extended gestation period ahead of obtaining approvals from prospects. “We estimate 14.5% CAGR in revenue led by double digit growth across all verticals. We project EBITDA/PAT CAGR of 20.5%/28% over FY21-23E led by strong margin and lower finance cost,” HDFC Securities stated in the note. They added that their bullish view on Jubilant Ingrevia is on the back of sturdy demand atmosphere, wholesome market place share, sturdy capex programme in the medium term and new additions of solutions, and China+1 policy adopted by the businesses worldwide.
In the base case, HDFC Securities expects Jubilant Ingrevia to hit a target of Rs 795, valuing the business at 24.5x FY23E EPS. However, their bull case target value is placed at Rs 844 per share, translating to a possible 12.6% possible upside from existing levels.
Rakesh Jhunjhunwala earns huge profit
Along with his wife Rekha Jhunjhunwala. The huge bull owns a 6.29% stake in the business with more than 1 crore shares held by the ace investor. During the July-September quarter, contemplating that Rakesh Jhunjhunwala maintained his holdings in Jubilant Ingrevia, the huge bull is estimated to have earned Rs 202 crore of profit as the stock surged 44% greater for the duration of the time period.