Prabhudas Lilladher's research report on Jubilant Ingrevia
Jubilant Ingrevia (JUBLINGR IN) witnessed modest 2% sequential growth in revenue, while margins improved by 120bps sequentially, led by Pharmaceutical segment, which experienced volume growth, along with prices increase for a few products. Agrochemical is expected to see gradual demand recovery, with global inventory destocking largely over. During the quarter, both volumes and prices for niacinamide increased. Specialty Chemicals saw 13% YoY growth driven by rising volumes of pyridine derivatives. Nutrition segment saw 12% YoY improvement in revenue, while acetyl segment, which contributes 41% to overall revenue, declined by 10% YoY due to lower demand coming from the paracetamol end-use segment and lower prices. The company has been adding capacities across segments and has signed two CDMO contracts during the quarter, but we believe the agrochemical side of the business will continue to face challenges and revival is unlikely till Q4FY25. Further, net debt/equity is expected to increase as cash flow generated is not expected to sustain capex.
Outlook
The stock is trading at 43x FY26E EPS. We maintain our ‘HOLD’ rating on the stock with SOTP-based target price of Rs 696, valuing it on FY26/FY27.
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