Target: ₹1,150
CMP: ₹906
We initiate our coverage of Blue Jet Healthcare with BUY and SOTP-based TP of ₹1,150. Blue Jet’s key strength is its simplified business model — standalone entity, lean cost structure, debt-free balance sheet, and a niche portfolio — which lends itself to a strong margin and return profile, high revenue per commercialized product, and best-in-class asset turns.
We expect global sales of Bempedoic Acid to exceed $1 billion by CY27E, and we believe our estimates of the resultant opportunity for Blue Jet are conservative.
We see upside risks to the 31 per cent CY24-27 CAGR in Bempedoic Acid intermediate sales (where Blue Jet has an estimated about 75 per cent share in end API supplies), given the expected commercialisation of the product in multiple geographies and the potential introduction of triple combination products including Bempedoic Acid.
CDMO scale-up, accompanied by about 20 per cent CAGR in core contrast media intermediate as well as high-intensity sweetener sales on a depressed FY25 base, should drive 26/23 per cent EBITDA/PAT CAGR over FY25-27.
Blue Jet’s strong near-term earnings visibility and superior financial metrics (35 per cent + EBITDA margin, 25 per cent + RoE, 35 per cent+ RoCE – the highest in the CDMO peer-set) are reflected in our target multiples.