Jubilant Organosys to split agri & polymer business; posts Rs 100 crore profit for Q3 2010

Jubilant, however, foresees a 5% dip in FY 2010 outlook

Jubilant Organosys Limited, a leading custom research and manufacturing services company from India, will separate its Agri and Performance Polymer business as a strategy to focus more on its core life sciences business.

“Jubilant Organosys remains firmly focused on achieving superior results from its PLSPS (Pharma & Life Sciences) business and it has built a strong operating position within its defined verticals in this space,”stated Shyam S Bhartia, chairman & managing director and  Hari S Bhartia, co-chairman & managing director, Jubilant Organosys Ltd.

The proposed Demerger of Agri and Performance Polymer business into a separate company will enable both Jubilant Organosys as well as the new entity to focus on their respective core business, they added.

Jubilant Organosys also plans to have fresh capital infusion raising up to Rs. 1000 crore.  by way of equity / equity linked instruments.

Jubilant Organosys’s board of directors have given in-principle approval for both the dicisions, the company said while announcing its quarterly results for the term.

Jubilant’s revenues for the third quarter for the financial year 2010 grew by 5.7% and were at Rs961.5 crores against Rs 909.6 Crore last year.

Net Profits in Q3 FY 2010 grew by 215.1% and stood at Rs 100.8 crore from a loss of Rs 87.6 crore last year. The respective basic EPS was at Rs 6.83 in Q3 FY2010 against Rs (5.95) last year.

Jubilant had suffered a loss of Rs 87.6 crore in the corresponding quarter of the previous fiscal, the company said in a statement.

Jubilant’s Pharma & Life Sciences (PLSPS) segment grew at 13.0% to Rs 858.2 crore from Rs 759.5 crore.

International sales formed 64.9% of the company’s total revenues. In Q3 FY 2010 international sales grew by 8.5% and stood at Rs 624.2 crore from Rs 575.1 crore in Q3 FY 2009.

In Q3 FY2010 the EBITDA grew by 52.1% and was at Rs 237.9 crore from Rs 156.4 crore earlier. The EBITDA margin stood better by 750 bps at 24.7% from 17.2% last year.

Jubilant’s biggest contribution to revenue came from CRAMS, which benefited from robust volume growth.

The performance was strong in the CMO business. PLSPS has thus witnessed a strong increase in EBITDA margins as a result of expansion in CRAMS margins and margin stabilization in Life Sciences Chemicals, commented Bhartias.

However, Jubilant sees the EBITDA guidance of Rs. 875 to Rs. 900 crores could be impacted to the extent of 5% on account of change of execution profile of certain contracts signed and due to fluctuation in foreign currency.

Jubilant Organosys Ltd has a presence across products and services such as proprietary products, exclusive synthesis, active pharmaceutical ingredients, contract manufacturing of sterile injectables & non-steriles products, radiopharmaceuticals, generic dosage forms, drug discovery services, medicinal chemistry services, clinical research services, and health care.

Jubilant also manufactures industrial and Performance products.