Buy Blue Jet Healthcare; target of Rs 665: ICICI Securities

Moneycontrol • 4 days ago

Original source

Key Investment Pillars

  • Blue Jet Healthcare's contrast media segment revenue grew 79.7% YoY, driven by volume offtake in key molecules and ramp-up in newer NCE molecule.
  • The PI/APIs segment surged to INR 1.8bn, led by higher volumes for the cardiovascular molecule bempedoic acid, with strong order visibility for FY27.
  • The company is working on new product development across segments, including an NCE molecule in the contrast media intermediate segment, and expects a commercial ramp-up to coincide with its Vizag facility.
  • BlueJet is reviewing customer pricing contracts and effecting price increases for select customers to partly aid gross margin recovery, which was impacted by increased prices for raw materials, reagents, solvents, and catalysts.

Thesis Validation Checklist

  • Investors should watch for sustained revenue momentum in H2FY27, driven by the contrast media and PI/APIs segments.
  • Gross margin recovery will be key, driven by price increases and operational efficiencies.
  • New product development and commercial ramp-up at the Vizag facility will be crucial for long-term growth.
  • The company's ability to manage raw material costs and negotiate price increases with customers will be important to monitor.