Rahul Saraogi presented his in-depth investment thesis on Jubilant LifeSciences (India: JOL) at Asian Investing Summit 2017. Rahul set the stage by also providing a macro assessment of the investment environment in India from a value-oriented standpoint.
Jubilant LifeSciences is a life sciences and biopharma company and part of the Jubilant Bhartia Group. Jubilant LifeSciences is a diversified business and a misunderstood company. It is a strong player in niche specialties, with strong growth ahead and an undemanding valuation. The future spinoff of the pharmaceuticals business provides a catalyst. The Bhartia Group has been friendly to minority shareholders. Jubilant’s leveraged balance sheet is improving, and the business has high margins and generates high returns on capital. According to Rahul, one-off events de-rated the stock, and an overhang of General Atlantic’s stake is now behind the company.
Rahul expects EBITDA to grow to $450 million for the twelve months through March 2019, up from $220 million over the past twelve months, driven by a roughly ~50% increase in revenue. This would have the effect of decreasing the EV/EBITDA multiple from 11.3x to 5.5x, assuming no change in the share price.
Rahul Saraogi leads Atyant Capital Advisors, advisor to the Atyant Capital India Fund. In the last 14 years he has focused on the Indian markets. His mission is to consistently identify the best 10-15 investment ideas from among the thousands of publicly-traded Indian corporations. Rahul’s value-based investment philosophy stands apart due to his belief in the paramount importance of corporate governance, specifically how management operates with its minority shareholders in mind. Prior to Atyant, Rahul Saraogi spent four years leading Meridian Investments, generating a 430% absolute return for the firm’s high net worth clients. He graduated from the Wharton School of the University of Pennsylvania with a degree in Economics. Outside of Atyant, he practices Vipassana, a 2,500 year-old meditation technique that helps people see things as they really are. Rahul Saraogi splits time between Chennai, India and Miami. You can read his latest thinking in the Atyant newsletter and blog, and connect with him on LinkedIn and Facebook.
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