Jubilant Pharmova waits on Montreal while its US plant races ahead

Jubilant Pharmova is the pharmaceutical arm of the Bhartia family's Jubilant group, the same group that runs Domino's in India through Jubilant FoodWorks. It earns about 95% of its revenue in dollars, mostly in the US, from scan medicines, allergy treatments and contract manufacturing of injectable drugs. On 12 October, Abakkus Four2Eight Opportunities Fund, part of Sunil Singhania's Abakkus, bought 11 lakh shares at ₹915 each, an investment of ₹100.65 crore.

What the company does

The largest business is radiopharma. Jubilant makes the radioactive medicines a hospital injects before a scan, so doctors can see the heart, lungs, bones or a tumour, and it runs the second-largest network of radiopharmacies in the US, which prepare those doses and deliver them to hospitals. Its Ruby-Fill system for heart scans is the fastest-growing product here: its installed base grew 35% in FY26.

The second engine is contract manufacturing. At plants in Spokane, in the US, and Montreal, in Canada, Jubilant fills injectable drugs into sterile vials for global drug companies. It is also the sole supplier of venom allergy treatment in the US, runs a drug-discovery services business in India, makes active ingredients and sells generic medicines.

Where the profit comes from

The mix matters because margins differ sharply. Scan medicines earned an operating margin of about 41% in FY26, and allergy treatments about 35%. The radiopharmacy network, the largest revenue line at ₹2,512 crore, earned almost nothing at the operating level. So the company's profits depend heavily on a small number of high-margin products.

The Montreal problem

Several of those high-margin scan medicines are made at the Montreal plant, and that plant has been the company's main problem for over a year. After a US regulator inspection classified the site as needing official action, Jubilant shut it from July to December 2025 to upgrade its quality systems and fix the issues found. Production restarted in early 2026, but staff had to be retrained before scan medicines could be released again, so supplies stayed short through the June quarter. The company estimates the shortage cost about $7 million of revenue in that quarter alone.

The regulator also issued a warning letter during the June quarter, based on an inspection carried out in late 2025. Jubilant says it has responded and is working through the observations with outside oversight. Management puts the Montreal loss at about ₹200 crore in FY26 including one-time costs, and it has moved development of new scan medicines to other manufacturers to reduce its dependence on the site. That decision pushed several planned launches from FY27 to FY28 and FY29.

The effect shows clearly in the quarterly numbers. Revenue kept rising, but operating profit fell to ₹268 crore in the June quarter and reported profit after tax fell 45% year on year to ₹56 crore, as the missing scan medicines, Montreal's costs and higher depreciation from new capacity all landed at once.

Commercial batches of scan medicines started at Montreal in the June quarter and are due to be released from the September quarter. Management expects all of the products to be available again, and margins to start expanding, from the second half of FY27.

Spokane, the part that is working

While Montreal was shut, the Spokane plant in Washington state grew quickly. Its revenue rose 48% in FY26 to ₹1,714 crore, with an operating margin of 27%, and grew another 43% in the June quarter. Large drug companies want US-based filling capacity to protect their supply chains and avoid tariff risk, and management says that has brought strong demand for its new lines.

A third filling line opened in September 2025 at a cost of $132 million. More than 10 products are now being transferred onto it, including one of the world's largest cancer medicines, with commercial production expected from late FY27 once the US regulator approves each product. A fourth line has been installed and is expected to start technology transfers by the March 2027 quarter. Management estimates the two new lines can add $160 to 180 million of annual revenue once fully used, at margins above the plant's normal level.

The US regulator also inspected Spokane in the June quarter. The company says none of the observations related to sterility assurance, and it has responded. A fifth line, at Montreal, is under construction at a cost of $114 million, partly funded by concessional loans from the Canadian government, with revenue expected from FY29.

Other growth projects

• PET scans: Jubilant is investing more than $60 million to expand its PET radiopharmacy sites from three to nine by FY28. It distributes Lantheus's prostate-cancer scan agent Pylarify and Novartis's Pluvicto, a prostate-cancer treatment.
• A cancer treatment of its own: MIBG, a radioactive treatment for a rare childhood cancer, has finished phase two dosing, and the company plans to file for US approval in the second half of FY27.
• Drug discovery: the India-based research business grew revenue 15% in FY26 and plans to expand capacity in phases to 4,000 staff by FY30.
• Generics: profitable for the past several quarters after years of losses, with six to eight launches planned this year.

The balance sheet

The expansion is being funded partly with debt. Net debt stood at ₹2,457 crore at the end of FY26, and net debt to operating profit rose from 1.5 times in March to 1.8 times in June as spending continued. Management expects a similar level of capital spending in FY27, debt to start falling from FY28 as the new Spokane lines generate cash, and net debt to reach zero by FY30.

Management's 2030 targets

Management has set out a plan to double revenue between FY24 and FY30. Two years in, revenue is up about 24%.

The margin target is a range of 23% to 25%, and the company also aims to lift its return on capital employed from about 12% to the high teens.

Who owns it

The Bhartia family and its companies own about 48% of Jubilant Pharmova. Among other large holders in March 2026 were Rekha Jhunjhunwala with 3.28% and Norway's Government Pension Fund Global with 3.17%. Abakkus was already a shareholder: its Emerging Opportunities Fund-1 held 1.15% in March. The 11 lakh shares bought on 12 October through a second Abakkus fund add roughly another 0.7% of the company.

Valuation today

At the reference price of ₹942.50, Jubilant Pharmova's equity value is about ₹15,000 crore. That is about 37 times FY26 earnings per share of ₹25.15 and about 2.1 times book value. The share price is close to where it was in September 2024, when it traded at ₹909.

Jubilant Pharmova is a company with one plant holding back the profits of its best products and another plant growing quickly on demand for US manufacturing. The next few quarters will show whether Montreal can supply scan medicines reliably again.

What to watch

1. 1
   Montreal supply

   Whether scan medicine batches are released on time and supplies return to normal by the second half of FY27

2. 2
   Warning letter

   How the US regulator responds to the company's remediation at Montreal

3. 3
   Spokane approvals

   Regulator approval of the products on the third line, and technology transfers on the fourth

4. 4
   Operating margin

   Progress from about 12% in the June quarter towards the 23% to 25% target

5. 5
   Net debt

   Whether debt starts falling from FY28 as planned