Rakesh Jhunjhunwala backed Jubilant Pharmova shares surge 13% on Monday; here is what is triggering the stock

Billionaire investor Rakesh Jhunjhunwala-backed Jubilant Pharmova shares jumped around 13 per cent to touch day’s high level of Rs 461.85 per share on the BSE intraday trade on Monday. The stock surged amid US FDA (Food and Drug Administration) approval of Doxepin Hydrochloride Capsules. 

As per exchange filing of Jubilant Pharmova, “The company has received Abbreviated New Drug Application (ANDA) final approval for Doxepin Hydrochloride Capsules, 10 mg, 25mg, 50mg, 75mg, and 100mg, the generic version of Sinequan.” 

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Doxepin Hydrochloride Capsules is used for the treatment of anxiety, depression, and other target symptoms of psychoneurosis, the company said in its filing to exchanges on Thursday. 

The company’s business had a total of 98 ANDAs for Oral Solids filed in the US, of which 61 have been approved and 4 Injectable/Opthalmic filings, of which 2 have been approved as of December 31, 2021, Jubilant Pharmova also said in the statement. 

Ace investor Rakesh Jhunjhunwala held around 10,020,000 equity shares, which comprises of 6.3 per cent stake in the company, as per the latest shareholding pattern on the exchanges. Rakesh Jhunjhunwala and associates publicly holds 37 stocks, as per stock analysis website trendlyne.com. 

Domestic brokerage house Motilal Oswal sees an upside of 38 per cent to Rs 550 per share as compared to Rs 408 per share on Thursday’s closing on the BSE. On valuations front, the brokerage estimates FY22E/FY23E/FY24E EPS at 24.3/27.9/39.1; P/Ex seen at 14.6/10.4x for FY23E/FY24E. 

The shares of the pharma company have underperformed the market, by falling almost 35 per cent in the last one year as compared to over 15 per cent rise in the S&P BSE Sensex. Similarly, the counter has gained around 5 per cent as compared to marginal fall of 0.5 per cent in Sensex.