Specialising in advanced resin and adhesive technologies, this small-cap chemical innovator has carved a niche in industrial solutions with consistent growth. This article explores its ambitious 20-25 percent revenue growth target for FY26, analysing expansion strategies, market positioning, and key challenges as it aims to sustain momentum in a competitive sector.
Jyoti Resins and Adhesives Limited’s stock, with a market capitalisation of Rs. 1,573 crores, rose to Rs. 1,327, up 2.5 percent from its previous closing price of Rs. 1,294.80. However, the stock over the past year has given a negative return of 0.23 percent.
Growth Outlook & Guidance
The company plans to reach revenue of INR 450–500 crore by FY27, growing 20–25 percent each year. For FY26, it expects revenue between INR 360–370 crore. It also aims to grow its sales volume by 25 percent every year for the next two years.
Furthermore, they plan to expand into 3–4 new states soon while strengthening their presence in 14 existing ones. New states are expected to become profitable in about 3 years. A mature state brings in INR 25–30 crore in revenue, has 400–600 retailers, and holds over 20–30 percent market share.
On the B2B side, the company is targeting modular furniture makers to grow its B2B segment, which currently contributes 5 percent of revenue. This is expected to increase to 10–15 percent in the next 2–3 years. However, B2B margins are lower, with EBITDA margins of 15–20 percent compared to the B2C segment.
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Capacity & Capex
The company is expanding its current plant by 1,500 T/month, reaching 3,500 T/month by FY25-end, with a capex of INR 5–7 crore. At 85 percent utilisation, this can support INR 650–700 crore in revenue. No major new investments are planned until a greenfield expansion in about two years.
Challenges
The company faces some headwinds, including a spike in receivables in March and lower margin guidance (25–28 percent EBITDA) due to higher ad spending. B2B growth will come with lower margins. Execution risks include the slow pace of state expansion and retailer onboarding and potential faster redemption of loyalty program points.
Recent Quarter Results
In Q4FY25, the company reported revenue of Rs. 78.6 crore, reflecting a growth of 10.5 percent YoY from Rs. 71.2 crore in Q4FY24 and 10.34 percent QoQ from Rs. 71.1 crore in Q3FY25. Net profit stood at Rs. 19.78 crore, up 5.4 percent YoY from Rs. 18.77 crore and 3.8 percent QoQ from Rs. 19.06 crore, indicating steady operational growth both annually and sequentially.
Receivables rose 34 percent YoY to INR 126 crore, driven by strong March sales of INR 47 crore. The credit cycle in mature states is 70–90 days, with bad debts under 1 percent, spread across 14 states and 12,500 retailers. Management expects receivables to normalise within two months after March.
Written By Fazal Ul Vahab C H
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