Rs 1,000 turned into Rs 1.40 crore in 38 yrs! This retired engineer made a killing on Dalal Street. Here’s how

Kuldeep Singh (65), a Ludhiana resident, has shown the benefits of long-term investing with his remarkable journey in the equity market. He invested Rs 1,000 in JB Chemicals & Pharmaceuticals during its IPO in 1986. After all the stock splits and bonus issues, the value of his investment stood at Rs 1.36 crore on June 7, 2024.  

In an interaction with BTTV, Singh said he received 100 shares at the face of Rs 10 in 1986. At present, he is holding 7,580 shares of JB Chemicals & Pharmaceuticals which closed at Rs 1,800 on June 7, 2024. In general, his story of wealth creation serves as a lesson for investors, showing that patient investing can lead to significant returns over time despite the market volatility. Singh retired as deputy chief engineer from Punjab State Corporation Limited in 2017 and the total value of his portfolio now stands at Rs 4 crore.

Data available with the corporate database Ace Equity showed that JB Chemicals & Pharmaceuticals has witnessed massive growth in its topline and bottom line over two decades.

Gross sales surged to Rs 3,484 crore in FY24 against Rs 276 crore in FY2002. On the other hand, net profit increased by more than 10 times to Rs 552.63 crore from Rs 42.05 crore during the same period. Historical data showed that JB Chemicals & Pharmaceuticals has advanced more than 8,030% since January 2000.

Market analysts see more steam in JB Chemicals & Pharmaceuticals (JBCP). BNP Paribas in May gave ‘Outperform’ rating to the company with a target price of Rs 2,104. “The key to success of JBCP’s new management has been its constant effort to enhance revenue share of segments which offer sustainable revenue growth and margins. Identifying gaps in the existing business and introducing new products, using both organic and inorganic routes, have worked out well for JBCP. We raise our FY25-26 EBITDA margin by 60 basis points as JBCP has raised its guidance to 26-28% from 25-27%,” BNP Paribas said in a report.

Likewise, SMIFS Limited initiated coverage on JB Chemicals & Pharmaceuticals with a target price of Rs 1,987. The brokerage in a report last month said that JBCP is a rapidly growing mid-sized pharmaceutical company in India, focusing on expanding its domestic presence through strategic acquisitions and CDMO (contract development and manufacturing organisation) business scaling up. In India, JBCP’s growth is accelerated by the market share gain and Rx increase in the acquired portfolio, successful lifecycle management of key brands, and increased contribution by the domestic portfolio from 41.6% in FY18 to 54.4% in FY24.

“The recent Ophthalmology brands acquisition diversifies JBCP’s India revenue base and solidifies its leadership in this therapy. The company places emphasis on its high-margin domestic business (we expect at 30% margins) and CDMO operations (we expect at 35% margins). JBCP is recognised as the preferred partner for leading MNCs and consumer healthcare companies globally in the field of Lozenges. By leveraging its strong presence in domestic markets and dedication to seizing emerging opportunities, along with strategic restructuring in the exports segment, JBCP is well-positioned to capitalize on immediate growth opportunities,” SMIFS Limited said.