A small cap stock with strong upside potential

1. Jupiter Bioscience
 Country of Incorporation: India
Jupiter Bioscience
 Industry: Biotechnology
 Geographic Facilities: USA, Switzerland
 Bombay Stock Exchange Code: 524826
 Current Market Price: INR 20.0
 Market Capitalization: INR 1,230 Mn
 Beta: 1.15
 Weighted Average Cost of Capital: 12.13%
1

2. Table of Contents
• Overview
• Products & Services
• Operating Summary
• Financial Information
• Capitalization & Leverage
• SWOT Analysis
• Peer Comparison
2

3. Overview
 Founded by Late K.S. Sarma in 1985 as a private limited company
 Successful commercialization of APIs production in 1987
 Listing on Bombay Stock Exchange in 1995 with a Face Value of INR 10.00 a share
 Set up a 100% subsidiary Sven Genetech Ltd for Peptide chemistry, Chiral chemistry & Biotech
 Incorporated Jupiter Bioscience Inc, USA to build manufacturing and marketing presence
 Commercialized processes for solid phase synthesis and production of unnatural amino acids in 2005
 Formed strategic alliance with Ranbaxy for Peptide API’s and formulations in 2007
 Acquired manufacturing facilities of Merck Biosciences in Switzerland to form Jupiter Bioscience AG in
2008
 Manufacturing facilities located in Bidar (in Karnataka), Cheriyal, Kazipally and Cherapally (all in Andhra
Pradesh)
 Strong R&D team with a focus on Peptide Chemistry, Chiral Chemistry, Biotechnology and Organic
Chemistry
 Clientele includes Pharmaceutical Companies, Biotechnology Companies, R&D Institutions / Research
Companies
3

4. Products & Services
Peptide Building Blocks: Aminoacids and its Derivatives
Unnatural Aminoacids
Peptides: Pseudoproline Dipeptides
Peptide Coupling Reagents
Research Peptides
Generic Peptide APIs
Non Peptide Generic Drugs: APIs for human use
Veterinary APIs
Drugs Intermediaries & Fine
Chemicals
4

5. Products & Services
Jupiter Bioscience has a scalable presence in services including new complex
organic molecules, Chiral intermediates and peptides rendering a vast clientele.
Jupiter Bioscience also undertakes process development on part of clients for
Organic Chemistry, Peptide chemistry, Chiral Chemistry and Biotechnology.
Process
Custom Synthesis Development & Contract R&D
Scale up
Services
5

6. Operating Summary – Operating Cost Structure
7%
14% 14% 11%
17%
13%
12%
16% 14%
17%
Other Op. Exp.
R&D Exp.
81%
72% 77% Consumption of raw
70% 66%
materials
2007 2008 2009 2010 2011
6

7. Operating Summary – Segment Revenue (2011 figures unavailable)
1,450
1,250 Peptide Reagents and
Protected Amino Acids
1,050
Drug Intermediates
850
650
Speciality and Fine
Chemicals
450
Formulations
250
50
2007 2008 2009 2010
7

8. Operating Summary – Total Capex & R&D (2011 figures unavailable)
Total Capex (in Mn INR)
2010 2,059
2009 1,317
2008 1,623
2007 1,033
R&D Spend (in Mn INR)
822
556 515
413
2007 2008 2009 2010
8

9. Financial Information (Amt in Mn INR)
9

10. Capitalization
Debt Equity
Working Capital Corporate
Share Capital Share Premium
Loans Loans
INR INR
4,475 Mn 8,536 Mn
Unsecured Retained
Term Loans Reserves
Bank Loans Earnings
10

11. Leverage
EBITDA-Capex/Cash Interest
8.0  EBITDA exhibited robust growth during the
last four years (2007-10) primarily due to
7.1x steady growth in peptide reagents and
7.0 protected amino acids revenue. EBITDA
rose around threefold to touch INR 1,530
5.9x Mn in 2010, as compared to INR 551 Mn in
6.0 2007.
5.0  Capex remained in tandem with the
management decision to bolster fixed asset
base (plant & machinery, lab and R&D
4.0 equipments). The total capex (including
3.2x capital work in progress and maintenance
3.0
capex) during 2010 stood at INR 2.1 Bn as
against INR 1.3 Bn in FY 2009.
2.1x
2.0  Due to ongoing debt incurrence, EBITDA-
Capex/Cash Interest ratio started
1.0
deteriorating from FY2008. However, the
coverage ratio managed to improve in the
last concluded fiscal to 3.2 from 2.1 in
0.0 2009.
2007 2008 2009 2010
 *
11

12. Leverage
Debt/EBITDA Debt/Total Capital
4.0 0.6
3.5
0.5
3.0 3.4x 0.50 0.50
3.2x 0.47
3.1x
2.9 0.4
2.5
2.7x
0.38
2.0 0.3 0.34
1.5
0.2
1.0
0.1
0.5
0.0 0.0
2007 2008 2009 2010 2011 2007 2008 2009 2010 2011
12

13. SWOT Analysis
Strengths:
STRENGTHS:
WEAKNESS:
* Historically robust operating efficiency
* Pressure on bottom-line due to
* Global presence in emerging & increasing cost of raw materials
developed markets
* Relatively high leverage likely to
* Stronghold in process development for restrain debt financing
organic chemistry, peptide & chiral
chemistry * Revenue concentration from peptide
segment
OPPORTUNITIES: THREATS:
* Scope for diversification and expansion
* Patent expirations coupled with
into oncology & infectious disease segment
complexities in R&D to cast a burden on
* Govt incentive plans (Genome Valley) for growth
biotech sector and aging population to
* High margin industry inducing increased
provide strong revenue visibility
level of competition
* Management focus on entry into
US, European & Japanese markets.
13

14. Peer Comparison
14