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Growth story broadens beyond existing drivers

Blue Jet Healthcare (BLUEJET), a niche specialty chemicals and pharmaceutical intermediates company, is steadily transforming from a PI for cardiovascular molecule led growth story into a diversified healthcare platform. Leveraging its expertise in complex chemistry, the company is expanding across contrast media intermediates, other pharma intermediates, Glucagon-like Peptide-1 (GLP-1), peptide-related opportunities, and CDMO services.

* The Pharma Intermediates (PI) segment is expected to rebound strongly in FY27, as customer destocking and inventory normalization are now largely complete. Growth visibility remains strong, supported by a 34% YoY prescription growth for innovators' cardiovascular molecule products (Nexletol/Nexlizet), expanding FDA label expansions adding ~70m eligible patients, global penetration of innovators, upcoming combination therapy launches, and patent protection extending up to CY40.

* Beyond PI of cardiovascular molecule, BLUEJET is building a diversified growth pipeline with 4-5 new pharma intermediate molecules under development plus an increasing focus on GLP-1, peptide chemistry, and CDMO opportunities. The global GLP-1 market is likely to expand to USD150-200b by CY35 from ~USD40- 50b in CY25, driving strong demand for peptide manufacturing. This is projected to clock a 20-25% CAGR. The company is already undertaking laboratory-scale supplies to innovators and peptide manufacturers. In addition, it has built a CDMO pipeline of ~20 active requests for proposals (RFPs), including six Phase III/commercial-stage opportunities, which could create long-duration revenue streams.

* Further, the contrast media business is emerging as a key growth engine for BLUEJET, supported by strong demand from GE HealthCare, two upcoming validations and one new commercialization, and advance commitments from a Japanese customer. Growth is further supported by two new molecules under development, including a patented gadolinium-based new chemical entity (NCE) with an estimated INR3-4b revenue opportunity. Backward integration at Mahad is expected to drive 100-400bp margin expansion.

* The INR10b Phase-I Vizag project represents BLUEJET's next growth platform rather than a conventional capacity expansion, with infrastructure designed to serve multiple high-growth opportunities, including contrast media, peptide fragments, CDMO projects, and specialty pharma intermediates. Management indicated that ~85% of the planned capacity is already linked to identified customer demand. The facility is expected to generate ~INR25b revenue at ~2.5x asset turns by FY30, nearly 2x BLUEJET's FY28E revenue base.

* We expect a CAGR of 19%/28%/25% in revenue/EBITDA/PAT over FY26-28. We value the stock at 35x FY28E EPS to arrive at our TP of INR720. We reiterate our BUY rating on the stock.

Clear growth visibility in PI of cardiovascular molecule

* The Pharma Intermediates segment witnessed customer destocking and inventory normalization through FY26, resulting in delayed order flows. The destocking is now complete, shipments have already resumed, and FY27 revenues are expected to exceed the previous peak achieved in FY25.

* Innovator’s cardiovascular molecule products (Nexletol/Nexlizet) reported US sales of USD159.6m in CY25, growing 38% YoY. Prescription volumes rose 34% YoY, indicating that the molecule remains in a strong growth and adoption phase.

* Patient accessibility has improved significantly, with >90% of commercial and Medicare beneficiaries in the US now covered, supporting broader physician adoption and accelerating prescription growth.

* Following the FDA’s cardiovascular risk reduction label expansion (the label now allows use beyond LDL lowering to reduce the risk of major cardiovascular events such as heart attack and stroke, particularly among statin-intolerant patients), the TAM has expanded materially. Industry estimates suggest that up to ~70m US patients could potentially be eligible for cardiovascular molecule’s therapy over time.

* Innovator’s global commercialization strategy is creating incremental demand opportunities. In Europe, partner Daiichi Sankyo has expanded the franchise to 500k+ patients, while the recent launch in Japan through Otsuka Pharmaceutical opens access to the world’s third-largest cardiovascular prevention market.

* Further, additional launches and commercialization efforts across Canada, Israel, and other international markets are expected to broaden the global demand base and support sustained volume growth over the medium term.

* Innovator is developing two triple-combination therapies incorporating the same cardiovascular molecule alongside ezetimibe (reduces cholesterol absorption from the gut) and statins (reduce cholesterol synthesis in the liver), targeting 60-70% LDL reduction. These products are expected to launch around CY27 and could materially expand the molecule’s addressable market.

* The same cardiovascular molecule remains a mandatory component in these combination therapies, implying that successful commercialization would directly increase API demand across the value chain.

* The franchise benefits from a long exclusivity runway, with core patents extending through CY32, while settlement agreements with generic challengers effectively delay US generic entry until CY40 (through ANDA), providing exceptional long-term demand visibility.

* BLUEJET is an established supplier within the cardiovascular molecule value chain, supplying the innovator and its licensees and maintaining approximately one year of order visibility.

1) expanding patient eligibility,

2) accelerating global penetration

3) new combination product launches

4) patent protection extending up to CY40, the Pharma Intermediates segment is well positioned for sustained growth going forward.

Valuation and view

* BLUEJET's growth has been largely driven by PI of cardiovascular molecule, contrast media intermediates, and sweeteners; however, the Hyderabad R&D center and Vizag project significantly expand its opportunity set into GLP-1 intermediates, peptides, specialty APIs, and regulated-market CDMO opportunities going ahead.

* We believe at current levels the market largely values BLUEJET based on its existing businesses, while assigning limited value to emerging opportunities such as the 20 active CDMO RFPs, six Phase III/commercial-stage programs, the GLP-1 pipeline, and the customer-backed INR10b Vizag expansion.

* If executed successfully, these initiatives could transform BLUEJET from a niche intermediates supplier into a diversified specialty pharma and CDMO platform, driving higher revenue diversification, lower concentration risk, and a potential re-rating in valuation multiples over FY27-FY30.

* We expect a CAGR of 19%/28%/25% in revenue/EBITDA/PAT over FY26-28E. We value the stock at 35x FY28E EPS to arrive at our TP of INR720. We reiterate our BUY rating on the stock

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