Jubilant Organosys – No Surprises in Q4

Jubilant’s recurring 4QFY08 results were in-line with expectations, with a robust trend in revenues as well as profitability. The high margin PLSPS business (especially CRAMS) was the key growth driver and now contributes c62% of revenues.

Sales growth of 38% YoY (22% organic) and 443 bps expansion in EBIDTA margins led to an 87% increase in recurring PAT. Reported PAT was buoyed by translation gains (Rs1bn). CRAMS was the key growth driver, up 86% YoY (46% organic), while industrial products benefited from lower molasses prices (down 20% YoY) and higher selling prices. Jubilant also guided to a 35% organic revenue growth and higher EBIDTA margins.

Jubilant indicated that organic capex for FY09 would be cRs7.5bn – higher than our estimates by cRs3bn – funded through debt and internal accruals. Company hopes to report an EPS of Rs 22 in FY07.