Blue Jet Healthcare Limited
Q4 FY25
Call date · May 14, 2025
1 · Management Commentary
Key Positives
- Record-setting year with highest-ever revenue, EBITDA, and PAT on both quarterly and annual basis.
- Q4 FY25 revenue from operations at Rs. 3,404 million (up 7% QoQ, 85% YoY); EBITDA at Rs. 1,400 million with 41% margin.
- FY25 revenue at Rs. 10,300 million (up 45% YoY); EBITDA at Rs. 3,777 million (37% margin, up 65% YoY); PAT at Rs. 3,052 million (up 87% YoY).
- Pharma intermediates/API segment revenue grew over 4x YoY, driven by cardiovascular intermediate scale-up.
- Strong cost discipline; gross margins stable at 55%, EBITDA margin improved from 32% to 37%.
- Debt-free status maintained; cash and treasury investments of Rs. 2,848 million as of March 31, 2025.
- Dividend of Rs. 1.20 per share declared (subject to approval).
Key Negatives
- Contrast media segment degrew by 15.8% in FY25 due to H1 slowdown and goods in transit in Q4.
- Marginal growth of 4% in high-intensity sweeteners segment amid global headwinds.
- Working capital requirement increased by approximately Rs. 250 crores due to business scale-up.
- No specific timeline disclosed for new Dahej site capacity addition.
Forward Guidance
- Capex plans: Committed Rs. 400 million for new R&D center; Rs. 300 crores for Mahad Unit-3 and MPP; Rs. 60 crores for process excellence at Unit-2; ongoing land acquisition at Dahej for future expansion.
- New products/segments: Focus on amino acid derivatives, advanced intermediates, late-stage NCE intermediates, and high-intensity sweeteners; new R&D center in Hyderabad.
- Expected client wins/losses: Tracking 20 new RFPs, ~30% in late phase 3 or commercial; strong traction from Europe-based innovators and global CDMO de-risking from China.
- Revenue/margin outlook: Confident of sustaining growth momentum with multi-year contracts and capacity headroom; no explicit forward guidance on margins or revenue.
- Other strategic initiatives: Backward integration at Mahad Unit-3 (continuous processing, H2 FY26 go-live); multipurpose plant (MPP) at Mahad (H2 FY27 go-live); focus on sustainability (70% energy from solar/wind); process upgrades for solvent recovery and waste reduction.
2 · Q&A Highlights
Q 1 (Composite): How secure is Blue Jet’s wallet share with key innovator customers in pharma intermediates, given their intent to diversify suppliers?
A (Management):
• Customer forecasts for FY25 remain intact; company is in “good books” with the innovator due to successful scale-up and performance.
• Any evaluation of alternate suppliers by customers is standard, but Blue Jet’s position is strong.
Q 2 (Composite): What is the current and potential capacity utilization across segments, and how does this relate to revenue run-rate?
A (Management):
• Pharma intermediates at 60–65% utilization; overall company utilization at ~75% (excluding Mahad expansion).
• Q4 utilization higher than full-year average; significant headroom remains for further ramp-up.
Q 3 (Composite): What is the outlook for contrast media and new molecules (gadopiclenol, iodinated intermediates), and how will these impact growth?
A (Management):
• Gadopiclenol (NCE) growth will be linear, tracking innovator’s market success; Blue Jet is sole supplier of advanced intermediate.
• Iodinated intermediate commercialization expected in FY26, with full potential in FY27.
• Base business in contrast media expected to grow from current Rs. 400 crore level, with new molecules adding to growth.
Q 4 (Composite): How are margins expected to evolve with new product mix and capacity additions?
A (Management):
• No explicit forward guidance, but business is in price-inelastic markets with limited pricing pressure.
• Margin expansion driven by operating leverage and product mix shift.
Q 5 (Composite): What are the details and strategic rationale for upcoming capex (Mahad, Dahej, R&D), and how is demand visibility driving these investments?
A (Management):
• Mahad Unit-3 (continuous process, backward integration) and MPP (multipurpose, GMP-compliant, 30 reactors) to go live in H2 FY26 and H2 FY27, respectively.
• R&D center in Hyderabad to focus on new chemistry platforms (peptides, GLP-1s, biocatalysts).
• Dahej land acquired for future expansion; timelines not yet disclosed.
• Capex plans are closely aligned with client lock-ins and demand visibility, especially for new opportunities and CDMO de-risking from China.
Q 6 (Composite): What is the status of new product pipeline and late-stage opportunities?
A (Management):
• Tracking ~20 new opportunities, ~30% in late phase 3 or commercial; some in advanced discussions with kilo quantities already supplied.
• Focus on advanced intermediates for GLP-1s, cardiovascular, oncology, and chronic segments.
Q 7 (Composite): Any impact from China’s export restrictions on gadolinium or regulatory/tax issues?
A (Management):
• No impact from China’s gadolinium export restrictions; business as usual.
• Income tax notice of Rs. 200 crores under appeal; company comfortable with its position, no significant cash flow impact expected.
Q 8 (Composite): What is the plan for fund-raising (Rs. 1,500 crore) and future capex beyond Mahad and Dahej?
A (Management):
• Details to be shared in upcoming quarters; baseline capex (excluding new sites) is Rs. 300+ crores for FY25.
3 · Other Key Numbers
- Q4 FY25 revenue from operations: Rs. 3,404 million (up 7% QoQ, 85% YoY)
- Q4 FY25 EBITDA: Rs. 1,400 million (margin 41%)
- FY25 revenue: Rs. 10,300 million (up 45% YoY)
- FY25 EBITDA: Rs. 3,777 million (margin 37%, up 65% YoY)
- FY25 PAT: Rs. 3,052 million (up 87% YoY)
- Dividend declared: Rs. 1.20 per share (subject to approval)
- Cash and treasury investments as of March 31, 2025: Rs. 2,848 million
- Company remains debt free
- Pharma intermediates/API segment revenue growth: 388% YoY (full year)
- High-intensity sweeteners turnover: Rs. 133 crore (FY25), up 4.1% YoY
- Gross margin: 55% (stable)
- EBITDA margin: 37% (up from 32% in FY24)
- Cash conversion cycle Q4 FY25: 139 days (vs. 135 days in Q4 FY24)
- Working capital increase: ~Rs. 250 crores
- CWIP for FY25: Rs. 89 crores
- Proposed fresh capex for FY25: ~Rs. 300 crores
- New capacity added: 157 KL at Unit-2 Ambernath
- Renewable energy contribution: ~70% of total energy requirement
- Number of pharma intermediate molecules: 28 (up from 22 previous quarter)
- R&D tracking 20 new opportunities (~30% late phase 3/commercial)
- EPS for FY25: Rs. 17.59 (vs. Rs. 9.44 in FY24)
- Income tax notice: Rs. 200 crores (under appeal)
- CAPEX for new R&D center: Rs. 40 crores
- Process excellence initiative at Unit-2: Rs. 60 crores
- Planned Mahad Unit-3/MPP capex: ~Rs. 300 crores (up from Rs. 250 crores previously planned)