Jubilant Pharmova: Can Spokane and radiopharma unlock the next growth phase?

Jubilant Pharmova: 1-Year Stock Price Movement

Source: TradingView

These are also the areas where Jubilant is deploying significant capital today, making the company’s current earnings a somewhat misleading indicator of its underlying growth potential.

Revenue grew 14% to Rs 8,280 crore in FY26, while EBITDA rose 8% to Rs 1,326 crore and normalised PAT increased 7% to Rs 442 crore. These headline numbers were weighed down by the disruption at the company’s Montreal facility following the US FDA warning letter.

Underneath the near-term earnings pressure, however, Jubilant is investing in capacity that could materially reshape its earnings profile over the next three years.

6 businesses, but not 6 equal stories

Source: Q1 FY27 Investors Presentation

Radiopharma is the largest and most differentiated business. It combines radiopharmaceutical manufacturing with a US radiopharmacy network, giving the company exposure to both the product and distribution sides of nuclear medicine. Jubilant operates more than 45 radiopharmacies in the US.

Allergy Immunotherapy is the steady compounder. FY26 revenue was around Rs 785 crore and EBITDA Rs 278 crore, with an EBITDA margin of 35.4%.

Sterile injectable is the most important growth engine. Revenue reached Rs 1,755 crore in FY26, up 38%, with Q1FY27 continuing the growth trajectory at 34% year-on-year.

Then there is CRDMO, where drug discovery is beginning to show operating leverage. Generics is recovering from a weak base. Proprietary Novel Drugs remain an option for future licensing or successful clinical development rather than a meaningful contributor to today’s earnings.

That leaves a fairly clear picture. Allergy provides the base. Radiopharma provides scale and optionality. Sterile injectables could provide the next major leg of growth.

And the most interesting asset in that growth story sits in Spokane, Washington.

Spokane: From manufacturing plant to commercial CDMO platform

Jubilant HollisterStier’s Spokane facility is not simply adding another manufacturing line. It is being transformed into a much larger US-based sterile injectables platform capable of taking products from clinical development through commercial manufacturing. That matters because complex injectable manufacturing is difficult to move once a CDMO becomes embedded in a customer’s supply chain. Technology transfers, validation, sterility requirements, regulatory approvals, and commercial-scale manufacturing all create switching costs.

Jubilant has already taken the first major step.

Line 3, an isolator-based high-speed filling line, increases Spokane’s capacity by roughly 50%. More than 10 products across different vial formats are undergoing technology transfer, including programmes from large pharmaceutical customers.

This is where the story moves beyond capacity announcements because the facility is shifting from being built to being commercialised. And the timing couldn’t have been more favourable.

CDMO sterile injectables (SI) market size

Source: Q1 FY27 Investors Presentation

Global pharmaceutical companies increasingly want manufacturing redundancy and greater supply chain resilience, particularly for complex sterile products. A US manufacturing footprint gives Jubilant an advantage that a low-cost manufacturing facility elsewhere may not: proximity to customers, regulatory familiarity, and supply chain security.

The Spokane facility is approved across major regulatory jurisdictions including the US FDA, MHRA, Health Canada, and Japan’s PMDA. But the bigger opportunity is still ahead. Jubilant has committed approximately $300 million toward a two-phase expansion that is expected to take Spokane toward roughly 100 million vials of annual capacity by FY28.

That is a substantial investment for a company of Jubilant’s size. The economics, therefore, matter more than the headline capacity number.

The key question is: What EBITDA can Spokane generate at mature utilisation?

The business has already demonstrated demand, with sterile injectables revenue growing 38% in FY26 and 34% in Q1 FY27. If the new capacity is getting absorbed at attractive margins, then Spokane could become one of Jubilant’s largest EBITDA contributors.

Radiopharma: The other major growth engine

If Spokane is Jubilant’s manufacturing growth story, radiopharma is its differentiated specialty pharma story.

Jubilant’s radiopharma business combines manufacturing with a US radiopharmacy network. That gives it an unusual position in nuclear medicine: it participates in both making the products and getting them to the patient.

The next opportunity is increasingly in Positron Emission Tomography (PET). Jubilant is investing in additional PET manufacturing capacity across the US, expanding the geographic footprint of its radiopharmacy network.

That matters because radiopharmaceuticals are unlike conventional drugs.

Many have extremely short usable lives (as certain radioactive isotopes have half-lives of only a few hours), which makes local manufacturing and distribution infrastructure strategically valuable. A larger network can therefore expand the addressable market rather than simply add manufacturing capacity.

The company is also expanding its Ruby-Fill installed base, a Rubidium-82 generator used for PET myocardial perfusion imaging. The attraction here is the installed-base model: every additional installation can support recurring demand for the associated radiopharmaceutical.

And the opportunity could eventually move beyond diagnostics.

Radiopharmaceutical therapy is becoming an increasingly important area of oncology, with targeted radioactive molecules offering a new way of treating cancer. Jubilant has been building optionality around this market through its work on therapeutic radiopharmaceuticals and isotope partnerships.

Source: Q1 FY27 Investors Presentation

The company therefore has three layers of potential growth inside radiopharma:

• Single-Photon Emission Computed Tomography (SPECT) recovery
• PET expansion
• Longer-term therapeutic radiopharmaceuticals

The first restores existing earnings. The second expands the current business. The third could create an entirely new market.

The supporting businesses are getting better

Jubilant does not need every division to become a high-growth business. Allergy Immunotherapy is a good example.

The business generated approximately Rs 785 crore of FY26 revenue and Rs 278 crore of EBITDA. Its value is less about explosive growth and more about providing a stable, high-margin earnings base while Jubilant invests elsewhere.

CRDMO is showing a different kind of improvement.

Drug Discovery revenue grew 8% to Rs 174 crore in Q1 FY27, but EBITDA increased 43% to Rs 45 crore, taking margins to roughly 26%.

That is encouraging because it suggests Jubilant can grow earnings faster than revenue if the service mix improves. Generics is also moving in the right direction. FY26 revenue was around Rs 774 crore, while EBITDA rose to Rs 83 crore from a very low base.

Neither business is likely to drive the next phase of Jubilant’s growth on its own. Together, they provide an increasingly useful earnings cushion around Spokane and radiopharma.

Q1 FY27: Strong revenue, temporary margin pressure

Jubilant’s Q1 FY27 results were mixed. Revenue grew 17% YoY to Rs 2,229 crore, but EBITDA declined 11% to Rs 268 crore and PAT fell 45% to Rs 56 crore. The main drag was radiopharma, where certain high-margin SPECT products manufactured at the Montreal facility were temporarily unavailable following regulatory observations and subsequent remediation work.

Source: Q1 FY27 Investor Presentation

The disruption affected margins because these products carry a relatively high contribution. However, it appears to be temporary rather than a structural loss of the business: management has indicated that commercial production has restarted following successful media fills, with the affected SPECT portfolio expected to become available during H2 FY27.

Importantly, the underlying growth businesses remained strong. Sterile injectables revenue grew 34% to Rs 496 crore, while CRDMO also delivered strong EBITDA growth. If the Montreal portfolio normalises while Spokane and PET continue to scale, Jubilant could see margin recovery from existing assets alongside incremental earnings from its new capacity.

Financials: The capital cycle is now visible

The numbers show a company in the middle of an investment cycle.

FY26 revenue rose 14% to Rs 8,280 crore, EBITDA increased 8% to Rs 1,326 crore, and normalised PAT grew 7% to Rs 442 crore.

But operating cash flow tells a more interesting story. Jubilant generated approximately Rs 1,227 crore of operating cash flow in the last twelve months, while capital expenditure was around Rs 1,449 crore, resulting in negative free cash flow of roughly Rs 120 crore.

It is exactly what one would expect from a company building expensive manufacturing capacity. The issue is what happens next. Today’s capex must become tomorrow’s EBITDA and cash flow.

The balance sheet gives the company some room, but not unlimited room. Net debt/EBITDA is currently around 2.2x, versus 1.56x at FY25 year-end, reflecting the ongoing investment cycle.

That makes the next two years important. If Spokane and radiopharma ramp successfully, EBITDA should begin absorbing the additional debt. If utilisation disappoints, the same leverage becomes much more uncomfortable.

Valuation: The stock is pricing in some of the recovery

On trailing numbers, Jubilant Pharmova trades at roughly 14.4x EV/EBITDA and 13.6x EV/operating cash flow.

Those are not distressed multiples, but neither do they look excessive for a company with multiple potential growth engines in sterile injectables and radiopharma. The more important question is whether the earnings and cash flows can grow fast enough to make these multiples look reasonable over the next few years.

Source: http://www.screener.in

There is also past context. Jubilant’s EV/EBITDA multiple was around 13.5x at FY26 year-end, compared with 15.3x in FY25 and 14.8x in FY24.

So the stock is not trading at lower multiples compared to previous years. The upside case therefore has to come primarily from earnings growth, rather than multiple expansion.

If the new sterile-injectables capacity is commercialised successfully, PET expansion scales up, and radiopharma margins normalise, EBITDA and operating cash flow could grow meaningfully from here.

The key question is whether that growth happens quickly enough to justify the valuation investors are paying today.

Risks and the bottom line

Execution: Spokane could take longer to reach optimal utilisation, while commercial launches and PET capacity additions may ramp more slowly than expected.

Capital intensity: Jubilant is investing heavily in new capacity, so delays in monetising these assets could keep free cash flow under pressure for longer.

Competition and concentration: Sterile injectables remain dependent on large pharma customers, while competition remains intense in parts of radiopharma.

Valuation: At roughly 14.4x EV/EBITDA and 13.6x EV/operating cash flow, the stock already prices in some improvement. It doesn’t need to fail operationally for forward returns to disappoint, so it simply needs to grow slower than expected.

The broader story, however, is the capital cycle underway at Jubilant. Spokane is evolving into a much larger US sterile-injectables platform, PET radiopharma capacity is expanding, and CRDMO is showing operating leverage, while Allergy Immunotherapy provides a high-margin earnings base. The capital has been committed. The next question is whether these assets can earn attractive returns.

Note: We have relied on data from http://www.screener.in and http://www.tijorifinance.com throughout this article. Market price and market capitalisation data are from Thurro. Only in cases where the data was not available, have we used an alternate, but widely used and accepted source of information.

Rahul Rao has helped conduct financial literacy programmes for over 1,50,000 investors. He has also worked at an AIF, focusing on small and mid-cap opportunities.

Disclosure: The writer or his dependents do not hold shares in the securities/stocks/bonds discussed in the article.

The website managers, its employee(s), and contributors/writers/authors of articles have or may have an outstanding buy or sell position or holding in the securities, options on securities or other related investments of issuers and/or companies discussed therein. The content of the articles and the interpretation of data are solely the personal views of the contributors/writers/authors. Investors must make their own investment decisions based on their specific objectives, resources and only after consulting such independent advisors as may be necessary.