Blue Jet share price gains post listing: Should you buy, sell or hold the stock now?

Blue Jet Healthcare share price was listed at ₹380 on the NSE (National Stock Exchange) almost 10% higher than the issue price of ₹346 on Wednesday. On the BSE (Bombay Stock Exchange) Blue Jet Healthcare share price was listed at Rs359.90 per share and touched highs of ₹395.85, during the morning trades.

Investor confidence had remained strong on the company as was visible from IPO subscription level as was subscribed 7.95 times, which as per analysts is a good subscription level.

Prashanth Tapse, Senior VP (Research), Mehta Equities Ltd post listing of Blue Jet Healthcare said that “Despite a weak market mood, Blue Jet Healthcare listing was better than street expectations. We believe the listing premium is justified considering its niche product portfolio. While we continue to advise conservative allotted investors to look to book decent profits on listing day while those who wish to buy more should wait and watch the market to settle considering decent long term industry rationales.”

Shivani Nyati, Head of Wealth, Swastika Investmart Ltd post listing of Blue Jet Healthcare said that “Overall, the listing of Blue Jet Healthcare was a success. The company's strong fundamentals and good subscription levels were positive factors for this". Investors may hold it by keeping a stop loss at Rs. 340, said Nyati.

As per Nyati, Blue Jet Healthcare is a manufacturer of contrast media intermediates and high-intensity sweeteners. The company has a strong competitive advantage due to its high entry barriers and long-term relationships with multinational customers. Blue Jet Healthcare’s financial performance is also strong, with consistent revenue and profit growth in recent years, said Nyati.

Blue Jet Healthcare is a specialty pharmaceutical company has presence in 3 major product categories. These include contrast media intermediates, high-intensity sweeteners, and pharma APIs (Active Pharma Ingredients). It is largest manufacturer of contrast media intermediates (71% of FY23 revenue) in India which are used in medical imaging to enhance visibility of body tissues under X-ray, as per analysts, CT scan, MRI & Ultrasound. Blue Jet Healthcare has long-term relationship & supply agreements with 3 of 4 largest global contrast media manufacturers, say analysts.

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As expected, Blue Jet Healthcare IPO had a decent listing on the bourses today, with a premium of around 14.4% to the issuance price of Rs. 346 per share due to sustained revenue and net profit growth which rose at a CAGR of 20.2% and 8.6%, respectively, during the FY21-23 period, said Prathamesh Masdekar, Research Analyst, StoxBox. Moreover, the company has strong RoE and ROCE of 26.6% and 31.9%, respectively, in FY23, said Masdekar. Further, the growth in the CDMO model, robust financial performance and expanding production capacity is likely to drive the company's performance going ahead. Masdekar remains optimistic on the issue and recommend investors who have received allotment to hold their shares on the opening day and consider buying on dips as well from a medium to long-term perspective.

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Analysts already had maintained a positive view on Blue Jet Healthcare and various analysts had recommended to invest in the Blue Jet Healthcare IPO.

Analysts at Motial Oswal Finacial Services had said that “We like Blue Jet Healthcare given its complex product portfolio, presence in niche space, strong client relationship and high entry barriers. The IPO is valued at 34x Q1FY24 P/E on an annualized basis. We believe the company could benefit from the planed capacity expansion and sector tailwinds. They had a recommend Subscribing to the  IPO.

Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before taking any investment decisions.