S&P views Jubilant Pharma negatively

S&P said it revised its outlook for Jubilant Pharma Ltd. to negative from stable and affirmed the BB ratings on the company and its $200 million of senior unsecured notes. The recovery rating on the notes remains 3.

“Jubilant Pharma's operating performance will remain weak over the next 12 months. We forecast the group's EBITDA will be lower by 10%-12% in fiscal 2023 (year ending March 31, 2023), compared to fiscal 2021 levels, despite an about 15% year-on-year growth. This is primarily because of the weaker performance of the group's generics and contract development and manufacturing operations (CDMO) business segments,” S&P said in a press release.

The outlook mirrors the possibility of a downgrade if Jubilant’s EBITDA margins remain under 20% and debt-to-EBITDA ratio stays above 2x without signs of improving toward about 2x beyond the next 12 months, the agency said.

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