Hold Jubilant Ingrevia; target of Rs 526: Prabhudas Lilladher

Prabhudas Lilladher's research report on Jubilant Ingrevia

Challenging market conditions continue to persist especially for the Agrochemical sector which may take another 1-2 quarters to get back to normal. Pharmaceutical segment had healthy volumes and the Nutrition segment saw steady demand for the quarter but due to excess supply from China, realization remained under pressure. Specialty chemical saw a 30% QoQ growth primarily driven by growth in Fine chemical & Microbial and Nutrition products. The company commissioned Multi-purpose agro actives & Intermediate plant and Diketene derivatives plant in Q4FY24 and aims to invest in opportunities such as Food and Cosmetic grade Niacinamide and Multipurpose Plants. We believe that although the company is adding multiple capacities performance and margins will continue to be impacted until international players keep on dumping at lower prices.

Outlook

The stock trades at 27x FY26 EPS. Reiterate ‘Hold’ rating with SOTP based valuation of Rs526.