KKR-led JB eyes acquisitions to grow faster

About 18 months after taking over JB Chemicals & Pharmaceuticals Ltd. (JB) from the promoters for ₹3,100 crore, private equity major KKR, through a new leadership team, has brought in a marked improvement in its performance, functioning and ranking in the pharma industry, a top executive said.

“We had a good asset in hand when we bought the company,” JB’s CEO Nikhil Chopra said in an interview. “We have strengthened our processes and systems and are now driving better governance. Today there is better discipline in optimisation of resources, how to get the best out of the team, how to get into the most progressive category of business,” he added.

Asserting that the promoters’ family had not taken that risk in a dynamic environment, Mr. Chopra said a professionally driven management was now changing it. “We are now looking at whatever opportunities we have in our hand and how the new launches would fuel the growth,” he said.

The company had acquired two brands for about ₹1,000 crore, including Sanzyme and Azmarda.

“This sort of investment had never happened in the history of this company. New products are now contributing to growth. We are now expanding our plants in the area of contract manufacturing; we are equipping our teams on the ground to adopt digital methods to connect with doctors. A lot of strengthening of fundamentals have been done,” he added.

Observing that JB had improved its ranking in the Indian pharma industry to 23rd, from 32nd, Mr. Chopra said the goal now was to maintain a growth rate of 18-20%, outpacing the industry average of 8-12%.

Outside India, the company planned to grow its contract manufacturing business by getting newer concepts in immunity and wellness. He said the company’s contract manufacturing business had potential to grow to a $100 million business in 5 years from $30 million currently.

JB had also embarked on a strategy to grow both organically and inorganically. “Inorganically we will continue to evaluate assets available in India .We will look at the right valuations and we have got many opportunities on the table,” Mr. Chopra said.

As part of a change in the corporate identity, the company had decided to brand itself as ‘JB’.

“In the last 18 to 20 months a lot of efforts have gone in building the right organisation, the right leadership team, strengthening processes and systems. We have not been shying away from investing in difficult times when people had backed out during COVID. So if there may be some stress on our balance sheet, we have done [whatever was needed] to make the company future ready,” he added.

In the financial year 2021-22, the company recorded revenue of ₹2,424 crore, a 19% growth from ₹2,043 crore in the previous year. Sales growth for the last quarter was 18%, with domestic formulations registering a growth of 30%, he added.

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