Jubilant Pharma: Fitch revises outlook to 'negative'; affirms 'BB' rating

Fitch estimates the pharma company's EBITDA to drop significantly in FY23 due to lower volume and narrowing of the margin to 11%

Fitch Ratings has lowered its outlook on Jubilant Pharma Ltd's (JPL's) long-term Issuer Default Rating (IDR) from “stable” to “negative” on expectation of a deterioration in the company's profitability. This is likely to see financial leverage of Jubilant Pharma surge to above the negative rating sensitivity level in the financial year ending March 2023 (FY23).

The agency affirmed the IDR at 'BB' for the Singapore-based company.

Jubilant Pharma's profitability should stabilise in FY24, which would help leverage return to below the negative rating sensitivity level. Nevertheless, JPL's weak headroom underscores the downside risks from operational underperformance or investments that were