Prabhudas Lilladher's research report on Jubilant Ingrevia
We got an opportunity to visit Jubilant Ingrevia's (JUBLINGR) Bharuch facility, one of its six manufacturing sites, and interact with the management. The facility is spread across ~310 acres, with land utilization of only ~20%, highlighting significant scope for future expansion. The site is well planned and houses four manufacturing units with integrated infrastructure. We expect the Specialty Chemicals and Nutrition segments to drive growth going forward. These businesses together contribute ~62% of revenue, and their share is expected to increase going ahead. Visibility of incremental orders under the agrochemical CDMO contract remains limited at present. Overall, the management has guided for FY27E EBITDA of INR7.5–8.0bn. In addition, the recent increase in acetic acid prices is expected to provide tailwind for sequential improvement in performance. With the company focused on executing its Pinnacle345 strategy, we expect revenue/EBITDA/PAT CAGR of 12%/18%/22% over FY26–28E.
Outlook
At CMP, the stock trades at 24x FY28E EPS. Using SoTP-based valuation, we arrive at TP of INR647, implying 25x FY28E P/E, and upgrade the stock to 'HOLD'.
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Jubilant Ingrevia - 0207026 - prabhu