Motilal Oswal has reiterated its 'Buy' rating on Blue Jet Healthcare with a target price of Rs 720. The brokerage points to a recovery in core pharmaceutical intermediates and expansion into new areas like GLP-1 drugs and contrast media as key growth drivers. Investors are focusing on the company's Rs 1,000 crore expansion plan in Vizag and its ability to manage inventory normalization.
Motilal Oswal Financial Services has maintained a 'Buy' recommendation on Blue Jet Healthcare, setting a target price of Rs 720 per share. The brokerage report highlights that the company is transitioning from a business focused on specific molecules to a broader healthcare platform, which is expected to support long-term growth.
The positive outlook is largely driven by Blue Jet Healthcare’s move into complex chemistry and new product areas. The company is actively expanding its presence in contrast media intermediates and emerging pharmaceutical sectors, including Glucagon-like Peptide-1 (GLP-1) drugs and peptide-related opportunities. These efforts, combined with the strengthening of its contract development and manufacturing organization (CDMO) services, are seen as vital for diversifying its revenue streams.
Financial performance recently showed mixed signals, which provides important context for investors. While the company reported a year-on-year revenue decline of 17.38% in the first quarter of fiscal year 2027, it achieved a sequential growth of 24.90%. The brokerage notes that this sequential improvement suggests the company’s core pharmaceutical intermediates business is beginning to rebound. This recovery is largely supported by the expectation that customer-level destocking and global inventory normalization are nearing completion, which had previously weighed on demand.
A significant part of the company’s future strategy involves a substantial capital expenditure plan. The company has approved an investment of Rs 1,000 crore for the first phase of a greenfield project located in Vizag. While this investment is intended to boost capacity and capabilities, it also brings execution risks. Investors should monitor how effectively the company implements this large-scale project, as delays or cost increases could impact financial flexibility.
Beyond the capital expenditure, growth is also supported by the company’s existing portfolio. Specifically, the prescription growth for its key cardiovascular products, such as Nexletol and Nexlizet, continues to be a factor. With expanded FDA label approvals potentially increasing the addressable patient pool and patent protections extending towards 2040, the company aims to sustain its market position.
Looking ahead, the main factors for investors to track include the actual execution of the Vizag expansion project and the continued stabilization of demand in the pharmaceutical intermediates segment. The company's ability to maintain its growth trajectory, with projected CAGRs of 19% for revenue and 25% for profit after tax between FY26 and FY28, will depend on both successful product launches and favorable market conditions in the healthcare sector.