J.B.

Chemicals & Pharmaceutical

RESEARCH INSIGHT

Shubham Negi | Dec 8, 2020

About J.B. Chemicals & Pharmaceutical

J.B. Chemicals & Pharmaceuticals Ltd. is a holding company, which engages in the
manufacture and trade of pharmaceutical products. It operates through the following
business units: India; Russia & CIS; Global; Contrast Media; API; and Business
Development. J.B chemicals is currently having the PE ratio of 25 whereas sector PE
running above 35. The company got strong financials along with it was able to Increase
revenue every quarter for the past year. Currently, the company is with strong
momentum: the price above short-, medium- and long-term moving averages which
shows the positive momentum in the stock for investment too.

The company was founded by Jyotindra Bhagwanlal Mody on December 18, 1976 and is
headquartered in Mumbai, India. The document consists of the shareholding pattern of
the company, management of the company, swot analysis, competitive analysis, and
conclusion.

 Shareholding Pattern
 Management of the Company
 SWOT Analysis
 Competitive Analysis
 Conclusion
Shareholding Pattern
Category-wise Shareholding pattern for the company till June 2020 stands as chart given
below. Maximum shares are held by the Promoters of the company with 45.01% and 0 % of
shares as Pledged. The Foreign Institution holds 7.25% of share which stands similar to the
previous Quarter whereas General Public, Foreign Promoters and others hold 20.73%, 10%
and 3.73% of shares respectively. The Mutual Funds and Banks holds 10.60% of shares
which shows the trust financial institute is having in the company.

% Share Holding

2% 10%

21% 46%

4% 11%
7%

Promoters ForeignInstitutions NBanksMutualFunds Others

GeneralPublic FinancialInstitutions ForeignPromoter

Management Team
The Management team of J.B Chemicals is led by Mr. Ranjit Sahani who is an Independent
director for the company. Mr. Sahani has got more than 3 decades of industry experience.
The Management team of J.B Chemicals is highly reputable and efficient. The team holds
strong integrity with fair, honest, transparent, and ethical conduct.

Mr. Ranjit Sahani

Independent Director

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SWOT Analysis

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 SWOT Analysis

Strength Weakness
- A company withno debt and good financial. - MFs decreased their shareholding last quarter
Decline in Quarterly Net Profit with falling Profit
- Improving Cash Flow from operation for Margin year on year.
the last 2 years. - High investment on the research development
- Existing distribution and sales network - Declining Net Cash Flow because companies
- High profitability and revenue not able to generate net cash recent results

Oppurtunity SWOT Threat

- Expanding Gloabl market business
- Growing economy and new
acquisitions deals with foreign partners
- Brokers upgraded recommendation or
target price in the past three months
- Stocks with high PE (PE > 40) and
valuation
- Government regulations and approvals
- High dependency on foreign market

Competitive Analysis
In comparison to its peers and big Pharma giants like Sun Pharma, Divi’s lab and Biocon
Ltd. J.B. Pharmaceuticals turns out to be small with the market capitalization of Rs.
7735.94 crores only. The J.B. Pharma relatively holds small ground in the market when it
comes down to providing the services across the globe but there is no direct competition
in its product segment, or the offering company make. The Company might be a small cap
company but hold good profits margins.

With more MNC’s and local Competition entering the market with the help of foreign
investors like Gland Pharma, Rossari Biotech, J.B. Pharma need be aware of the
competition pose by them as well as the existing companies in the market. J.B Pharma is
fundamentally very strong company and possess better financial statement and the
company is continuously improving its net cash flow from the operating activities. As of
now Sun Pharma, Divi’s lab and Biocon Ltd. are the biggest competitors in the Indian
market and companies like Pfizer, AstraZeneca & Torrent pharma is the global competitor
for J.B Pharmaceutical Ltd. The Annual profit is increasing for the company from last two
years and company future prospects further seems bright with growing customer base.

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 Name Last Price Market Cap. Sales Net Profit Total Assets
(Rs. cr.) Turnover
Sun Pharma 571 1,37,002.03 12,531.93 3,211.14 30,158.24
Divis Labs 3,700.50 98,236.65 5,310.57 1,372.71 7,350.32
Dr Reddys Labs 5,033.90 83,706.20 11,850.40 2,937.70 16,254.80
Cipla 769.2 62,031.83 12,659.15 2,318.17 17,409.02
Aurobindo
Pharm 900.6 52,769.63 13,266.48 1,872.74 16,755.88
Cadila Health 467.7 47,880.44 6,347.40 1,412.90 14,214.60
Torrent Pharma 2,683.15 45,404.99 6,168.00 939 9,050.27
Lupin 947.45 42,958.30 11,025.66 727.55 17,478.80
Gland 2,330.15 38,047.35 2,633.24 772.86 -
Alkem Lab 2,910.75 34,802.38 6,677.08 1,264.42 7,538.54
Abbott India 15,438.60 32,805.95 4,093.14 592.93 2,431.71
Ipca Labs 2,233.40 28,331.15 4,367.43 652.46 4,065.19
GlaxoSmithKline 1,550.85 26,272.33 3,224.68 110.05 1,840.05
Pfizer 5,320.00 24,337.79 2,151.65 509.13 3,486.67
Alembic Pharma 1,031.95 20,284.33 4,132.55 969.4 5,033.05
Sanofi India 8,050.35 18,540.46 3,070.60 414.2 2,442.30
Laurus Labs 333.95 17,899.55 2,797.34 267.05 2,743.26
Natco Pharma 965.95 17,598.29 1,790.20 474.5 4,183.50
Glenmark 533.4 15,050.85 6,712.63 1,354.55 16,800.02
Ajanta Pharma 1,695.15 14,793.03 2,196.42 441.13 2,461.30
Jubilant Life 869.9 13,855.87 3,139.90 321.14 4,558.18
AstraZeneca 4,585.25 11,463.13 831.81 72.21 364.44
Procter&Gambl
e 6,707.55 11,134.12 1,355.86 254.08 906.34
Suven Pharma 407.8 10,381.16 833.79 270.08 968.12
Granules India 387.5 9,597.40 2,309.93 444.07 2,604.19
Strides Pharma 882 7,905.84 1,674.15 111.7 4,027.62
JB Chemicals 1,001.00 7,735.94 1,640.74 268.14 1,477.33

Way Forward
J.B Pharmaceuticals Ltd. is a company with strong management team and financial
statements. The company as well as the stock is doing better than its competitors and they
should take leverage on the opportunities in developing nation and emerging markets.
The company should also focus on the domestic demand so that they do not have to rely
much over US or European markets. J.B has diverse portfolio in in services and offering
company make which leads to all round growth. The brokerage firm Dolat Capital recently
increased the target of J.B Chemical to Rs.1130 with a positive outlook on the company.
The KKR (Kohlberg Kravis Roberts & Co) took over 54% of the shares of the company in

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June, which gave the stock major boost, and it is expected to grow further as quarterly
results show a strong profit for the company. With US FDA passing JB Chemical
inspection in Gujrat can help the company to generate more revenue in the coming future.
Globally, there is an increase in demand for medicines and India being one of the largest
markets for Pharmaceuticals and can leverage over such opportunity.

References
https://www.moneycontrol.com/competition/jbchemicals/comparison/JBC01

https://www.jbcpl.com/

https://www.nseindia.com/get-quotes/equity?symbol=JBCHEPHARM

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