Jubilant Ingrevia shares gain on Equirus Capital target upgrade, sees 25% upside potential

So far this year, shares of Jubilant Ingrevia rallied over 40 percent

Shares of Jubilant Ingrevia jumped over 6 percent to Rs 717 apiece on September 4 after Equirus Capital maintained a 'long' rating and raised target price to Rs 900, implying an upside of 25 percent from current levels. The target upgrade came after global specialty maker Vertellus shut Pyridine production in the US, a solvent primarily used for paint, rubber, pharma, and other products.

At 11:09 am, shares were trading at Rs 723.15, up 7.3 percent.

Equirus said that the recent channel checks indicated rising niacinamide prices driven by higher pyridine costs. This, they believe, will boost near-term profitability in both specialty and nutrition segments. Also, it would target the semi-conductor industry wherein it is currently supplying samples in response to customer inquiries.

"We believe that securing large contracts could drive Jubilant Ingrevia closer to its FY29E growth target," Equirus highlighted.

ALSO READ: Hold Jubilant Ingrevia; target of Rs 592: Prabhudas Lilladher

Pyridine is a versatile and basic solvent known for its relative non-reactivity, making it an excellent acid scavenger. In the pharmaceutical industry, pyridine derivatives are utilised to treat neurodegenerative diseases, as well as for their antibacterial and anti-infective properties.

In the agricultural sector, pyridine is employed in the production of agrochemicals, such as herbicides, insecticides, and fungicides. Additionally, it is used as a flavoring agent, in antifreeze solutions, in certain disinfectants, and as an antiseptic in dental care products.

Recently, credit ratings agency India Ratings and Research assigned its term-loan ratings as 'stable.'

In the recently concluded June quarter, Jubilant Ingrevia's revenue declined 4.7 percent year-on-year (YoY), with profit-after-tax dropping by 15.5 percent YoY. The company's EBITDA also decreased by 6.1 percent YoY and EBITDA margin contracted by 20 basis points YoY in Q1FY25.

Looking forward, the management said that they expect improvement in all 3 business segments in FY25 and FY24 - be it pharma or agricultural CDMO segment.

So far this year, shares of Jubilant Ingrevia rallied over 40 percent, as compared to benchmark Nifty 50's 16 percent rise.

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