Blue Jet Healthcare crashes 17% in 2 days on Q1 Ebitda miss; here's target price
Blue Jet Healthcare: The stock fell 7.3 per cent to hit a low of Rs 840 on BSE. The scrip had plunged 10 per cent on Tuesday and edged 0.34 per cent lower on Monday.
- Jul 23, 2025,
- Updated Jul 23, 2025 12:43 PM IST
Shares of Blue Jet Healthcare Ltd crashed 17 per cent in two trading sessions on disappointing Q1 results, taking their recent fall to the third day in a row. The stock fell, even as the company's top line was ahead of Street’s estimates, with the beat being driven by higher pharma intermediate sales.
What overshadowed the overall print was Ebitda, thanks to a sharp sequential decline in gross margin on account of a reduction in inventory levels and the corresponding direct overheads hitting the P&L, and partly to a change in the product mix in favor of pharma intermediates, said Emkay Global. The stock fell 7.3 per cent to hit a low of Rs 840 on BSE. The scrip had plunged 10 per cent on Tuesday and edged 0.34 per cent lower on Monday.
The domestic brokerage believes a reversion in gross margin to 53 per cent levels in Q2 is likely, which is in line with the company’s guidance, given that gross margin has broadly remained in the 53-56 per cent range over the last 3 years. Emkay Global said it does not see any major disruptions on the raw material (RM) cost going ahead.
"A further uptick in utilization in Blue Jet’s dedicated capacity for the Bempedoic Acid intermediate will remain the key driver of near-term earnings performance. We cut FY26E/27E EPS by 9 per cent/4 per cent, as we moderate our gross margin assumptions. We retain Buy on the stock, while cutting our target (Jun-26E) by 9 per cent to Rs 1,050 (from Rs 1,150)," Emkay Global said.
As per the management, there were no significant procurement cost escalations during the quarter, and the company expects gross margin to revert to normalised levels going forward.
Among key Blue Jet results highlights, Contrast media intermediate sales are expected to see uptick in H2FY26, driven by new launches (gadolinium-based contrast media intermediate/BGB and Iodinated ABA HCl). The capacity for the company’s key raw material (APD) in Unit 3 (Mahad) will come onstream in H2FY26;and that the capex for Unit 3 has been revised upward by Blue Jet to Rs 300 crore from Rs 25 0 crore earlier. This is due to enhanced automation.
The company is in the advanced stage of acquiring a large land parcel, which in Phase 1 will comprise four production blocks – 2 for CMI, 1 for high-intensity sweeteners, and 1 multipurpose block.
"Blue Jet’s new R&D center in Hyderabad will focus on newer chemistry platforms, such as peptide intermediates for GLP-1s and biocatalysis. Blue Jet is focusing on high-conviction opportunities, as opposed to a library/catalogue approach, in the peptide space, and has developed 45 peptide fragments that can be commercialized immediately," Emkay Global said.
The company’s current pharma intermediate pipeline includes 20 RFPs (30 per cent in late Phase 3/commercial) against 11-12 RFPs last year.
Shares of Blue Jet Healthcare Ltd crashed 17 per cent in two trading sessions on disappointing Q1 results, taking their recent fall to the third day in a row. The stock fell, even as the company's top line was ahead of Street’s estimates, with the beat being driven by higher pharma intermediate sales.
What overshadowed the overall print was Ebitda, thanks to a sharp sequential decline in gross margin on account of a reduction in inventory levels and the corresponding direct overheads hitting the P&L, and partly to a change in the product mix in favor of pharma intermediates, said Emkay Global. The stock fell 7.3 per cent to hit a low of Rs 840 on BSE. The scrip had plunged 10 per cent on Tuesday and edged 0.34 per cent lower on Monday.
The domestic brokerage believes a reversion in gross margin to 53 per cent levels in Q2 is likely, which is in line with the company’s guidance, given that gross margin has broadly remained in the 53-56 per cent range over the last 3 years. Emkay Global said it does not see any major disruptions on the raw material (RM) cost going ahead.
"A further uptick in utilization in Blue Jet’s dedicated capacity for the Bempedoic Acid intermediate will remain the key driver of near-term earnings performance. We cut FY26E/27E EPS by 9 per cent/4 per cent, as we moderate our gross margin assumptions. We retain Buy on the stock, while cutting our target (Jun-26E) by 9 per cent to Rs 1,050 (from Rs 1,150)," Emkay Global said.
As per the management, there were no significant procurement cost escalations during the quarter, and the company expects gross margin to revert to normalised levels going forward.
Among key Blue Jet results highlights, Contrast media intermediate sales are expected to see uptick in H2FY26, driven by new launches (gadolinium-based contrast media intermediate/BGB and Iodinated ABA HCl). The capacity for the company’s key raw material (APD) in Unit 3 (Mahad) will come onstream in H2FY26;and that the capex for Unit 3 has been revised upward by Blue Jet to Rs 300 crore from Rs 25 0 crore earlier. This is due to enhanced automation.
The company is in the advanced stage of acquiring a large land parcel, which in Phase 1 will comprise four production blocks – 2 for CMI, 1 for high-intensity sweeteners, and 1 multipurpose block.
"Blue Jet’s new R&D center in Hyderabad will focus on newer chemistry platforms, such as peptide intermediates for GLP-1s and biocatalysis. Blue Jet is focusing on high-conviction opportunities, as opposed to a library/catalogue approach, in the peptide space, and has developed 45 peptide fragments that can be commercialized immediately," Emkay Global said.
The company’s current pharma intermediate pipeline includes 20 RFPs (30 per cent in late Phase 3/commercial) against 11-12 RFPs last year.