Jubilant Pharmova: discovery earns 26%, the rest drags

Jubilant Pharmova Limited (NSE: JUBLPHARMA) posted Q1 FY27 consolidated revenue of ₹2,229 crore, up 17% YoY. Net profit fell 45% to ₹56 crore. The stock closed at ₹999.30 on 1 October, trading at about 41 times earnings. What happened Drug Discovery Services revenue grew 8% to ₹174 crore, with EBITDA up 43% to ₹45 crore. Discovery margin reached 26%, up from 20%. The rest pulled the other way. SPECT radiopharmaceuticals were temporarily unavailable, the Montreal facility had remediation costs and no third-party revenue, and Spokane Line 3 depreciation added pressure. Net debt rose to ₹2,338 crore with net debt to EBITDA at 1.8 times. Why it matters India holds only 2% to 3% of the global CRDMO market against China's 18% to 21%. Jubilant is doubling FTEs to 2,000 by FY28 with US$150 million of capex, targeting over 20% ROCE. My view The discovery business is the headline. That earnings volatility is real and a P/E of 41 does not reflect it. It earned 26% margins on ₹174 crore of revenue. That is good. But it is not yet large enough to move consolidated earnings. CRDMO revenue grew only 2% to ₹309 crore, and the other segments, radiopharma, generics and sterile injectables, each had their own issues. The 45% profit fall is not discovery. It is Montreal and SPECT. Management expects both to normalise from H2 FY27. Five year PAT: ₹413 crore, a loss, ₹73 crore, ₹836 crore and ₹398 crore. That volatility is real