JUBLINGREA - Jubilant Ingrevia Limited Share Price

Management's outlook for FY'26 is optimistic, anticipating continued growth and improved performance driven by advancements in their Specialty Chemicals and Nutrition businesses, alongside a recovery in their Acetyl portfolio. They have committed to ongoing Lean 2.0 cost-efficiency initiatives aimed at enhancing margins.

Key forward-looking points include:

1. Expected Capital Expenditure (CAPEX) of Rs. 600 crore for FY'26, supporting growth initiatives, including the completion of a dedicated agro CDMO plant, projected to deliver in early 2026.
2. The company is targeting annualized savings exceeding Rs. 100 crore through Lean 2.0 optimization efforts.
3. Management has set an ambitious goal of achieving peak revenue potential of approximately Rs. 6,500 crore by FY'27, with expectations that capacity utilization will reach 70%-80%.
4. They are actively pursuing a broad sales funnel, with over 70 high-priority opportunities identified across various segments, reflecting strong market demand.
5. Performance in the Specialty Chemicals segment has been robust, contributing approximately 63% to total revenue and 90% to EBITDA, with a notable EBITDA of Rs. 130 crore and a margin of 27%.
6. The anti-dumping duties imposed by the EU on Chinese choline chloride products position Jubilant Ingrevia favorably in European markets, anticipating significant volume opportunities.
7. The company's recent capacity expansions are expected to enhance long-term scalability and efficiency, particularly in the Pyridine and Picoline segments, where they maintain a leadership position.

Overall, management expresses confidence in a sustained recovery across multiple product segments, with ongoing monitoring of external market conditions.

Here are the major questions from the Q&A section of the earnings conference call, along with detailed answers:

1. Question: "Can you give some sense on with this anti-dumping duty on China, what kind of opportunities this can open for us and what kind of volumes and pricing delta that we can see in this segment?"

Answer: The anti-dumping duty on Chinese Choline Chloride is a significant opportunity for us. As the market leader in India, we hold over 50% market share and have been exporting. The EU's 125% duty on Chinese products creates a potential access to a market running into tens of thousands of tons. We're preparing our product for the EU market and expect first shipments shortly. We aim to replicate our success with Vitamin B3 in this segment.

2. Question: "Does the management still maintain the outlook of reaching peak revenue of Rs. 8000 crore by FY'27?"

Answer: Yes, we maintain our outlook but would clarify that the peak potential is around Rs. 6500 crore rather than Rs. 8000 crore, depending on market pricing stability. As our Rs. 2000 crore CAPEX completes, we anticipate that by FY'27, 70%-80% of capacity utilization will be achieved, subject to market conditions.

3. Question: "Regarding the agro CDMO discussions, when can we expect more contracts?"

Answer: We are actively working on multiple contracts and are in advanced stages for five to six opportunities. It depends on the global macro environment, but we expect confirmations in the coming months as we maintain close communication with customers and send samples.

4. Question: "What is the addressable market for the 70 molecules in your pipeline?"

Answer: While I can't provide specific numbers, the addressable market is substantial, involving thousands of crores. We're confident that 70%-80% of these opportunities will materialize over time, with focus across key geographies: the EU, US, and Japan.

5. Question: "Do we have a material pricing advantage in Pyridine and Picoline as the largest producer?"

Answer: Yes, we do have some pricing power, particularly in the US market. While we run our plants at 80% capacity, our primary aim is to maximize volume and optimize costs, ensuring competitive pricing rather than solely dictating market price.

6. Question: "How do you see growth in the nutrition segment for the next 12 months?"

Answer: We expect growth driven by Vitamin B3 for food and cosmetics, alongside improvements in exports of Choline products. We aim for overall growth of 20%-25% year-on-year, offsetting potential short-term volatility from domestic pricing.

7. Question: "Could you break down your CDMO pipeline by end-user segments?"

Answer: Our CDMO business comprises three segments: pharma, agro, and semiconductor. The pharma segment has seen increased opportunities, while agro has limited large customers. Semiconductor opportunities are still nascent but show promising samples-led interest.

8. Question: "What specific CAPEX projects are in the pipeline?"

Answer: We're finalizing the Rs. 2000 crore dedicated plant in Bharuch, enhancing our boiler project, and debottlenecking existing plants for increased capacity. New multi-purpose plants will also be developed, and we remain focused on meeting anticipated demand.

9. Question: "What kind of CAPEX is being done for the CDMO business and expected returns?"

Answer: Of our Rs. 2000 crore investment, 70% supports specialty and multipurpose plants for CDMO. We expect a revenue-to-CAPEX ratio of at least 1.2 to 1.3 times, with specific margins varying per contract.

10. Question: "Can you comment on the anti-malarial product's export opportunity?"

Answer: While I can't confirm specifics, I can state we're optimistic about the product contributing significantly in the next few years and expect its potential to be 4-5 times what we'll achieve this year.