Jubilant Ingrevia Limited
Q4 FY25
Call date · May 13, 2025
1 · Management Commentary
Key Positives
- Sustained growth in revenue and margins for Specialty Chemicals and Nutrition businesses.
- Q4 EBITDA margin reached 14.7%; PAT up 153% YoY.
- Specialty Chemicals segment achieved highest-ever EBITDA (Rs.129 crore) and margin (27%) in 15 quarters.
- Nutrition & Health Solutions revenue up 15% YoY; EBITDA up 237% YoY.
- International revenue share increased to 45% (from 34% last year); US revenue up 22% YoY.
- Cost optimization initiatives delivered annualized savings of over Rs.120 crore; Phase-II launched targeting Rs.100–150 crore more.
- Board recommended a final dividend of 250% (Rs.2.5/share); total FY25 dividend at 500% (Rs.5/share).
- ESG leadership: Gold rating, 95th percentile Eco Vadis, 92nd percentile S&P Dow Jones Sustainability Index.
Key Negatives
- Chemical Intermediates segment underperformed due to weak demand in Paracetamol (impacting acetic anhydride volumes and pricing).
- Commodity segment volumes remain under pressure; prices muted and stabilized at lower levels.
- Choline pricing under pressure due to Chinese imports.
- Lower prices of ethyl acetate due to intense competition.
Forward Guidance
- FY26 capex plan of Rs.600 crore (including spillover from FY25), funded primarily via internal accruals.
- Focused investments in multi-purpose plants for Fine Chemicals, Diketene Derivatives, new CDMO projects, and Human Nutrition portfolio.
- Additional Rs.2,000–2,500 crore capex over next 3–4 years to achieve Pinnacle 345 Vision (Rs.10,000 crore revenue target by FY30).
- Ongoing ramp-up at cGMP-compliant Niacinamide plant (Bharuch); targeting 70–80% utilization in 18 months.
- Two new agro CDMO orders progressing; one to be commissioned by end-2025, second to start supplies in Q1 FY26.
- Continued cost optimization (Lean 2.0) to drive further margin improvement.
- Expect 15–20% annual growth in Specialty and Nutrition segments; company targeting 20% overall revenue CAGR to FY30.
- Strategic focus on expanding international business, especially US, Europe, and Japan.
2 · Q&A Highlights
Q 1 (Composite): When will the acetyl (acetic anhydride) business cycle bottom, and what is the outlook for recovery?
A (Management):
• Inventory destocking in key end-markets (paracetamol, agrochemicals) is nearly complete; demand and pricing expected to recover in coming quarters.
Q 2 (Composite): Despite margin improvement, revenue growth was muted in FY25—how does this align with the Pinnacle 345 Vision?
A (Management):
• Specialty and Nutrition segments grew 15% and 10% YoY, respectively; overall growth muted due to Chemical Intermediates decline.
• Confident of maintaining 15–20% growth in core segments and 20% company-level CAGR to FY30.
Q 3 (Composite): What is the revenue potential from the Rs.2,000 crore capex, and how much has been realized?
A (Management):
• Revenue-to-capex ratio ~1.5x; Rs.1,800 crore invested, with ~50% of potential revenue realized.
• Remaining Rs.1,000 crore+ incremental revenue expected as new capacities ramp up.
Q 4 (Composite): What is the normalized EBITDA margin outlook for Nutrition and other segments?
A (Management):
• Nutrition: Steady-state EBITDA margin of 16–18%; FY25 at 14%, Q4 at 16%.
• Specialty Chemicals: Targeting 22–25%+ margin.
• Chemical Intermediates: Long-term average 10–12%.
• Company-wide target: 17–18%+ margin.
Q 5 (Composite): CDMO business update—revenue, pipeline, and timeline for new opportunities (including semiconductor chemicals)?
A (Management):
• Segment-wise CDMO revenue not disclosed; business scaling rapidly with 25+ new molecules in pipeline (agro, pharma, semiconductor).
• Two major agro CDMO projects: one to start supplies in Q1 FY26, second by Jan 2026.
• Semiconductor chemicals: 8–10 molecules in pipeline; commercial revenues expected to start in next few quarters, initially small.
Q 6 (Composite): What differentiates Jubilant’s CDMO capabilities and how is the company building its competitive edge?
A (Management):
• Strong R&D (150+ scientists), deep expertise in 10–12 core chemistries, global leadership in pyridine and diketene platforms, and expanded BD teams in US/Europe/Japan.
Q 7 (Composite): Pricing outlook for FY26–27 across segments?
A (Management):
• Specialty Chemicals: Prices have stabilized at new normal; some marginal upside possible.
• Nutrition: Feed-grade prices stable; higher-value segments (cosmetic/food grade) offer better pricing.
• Chemical Intermediates: At/bottoming out; gradual price recovery expected.
Q 8 (Composite): Capex plans and funding for Pinnacle 345 Vision?
A (Management):
• Rs.600–800 crore annual capex planned over next 3–4 years (Rs.2,000–2,500 crore total), funded mainly through internal accruals.
3 · Other Key Numbers
- Q4 FY25 revenue: Rs.1,051 crore (Q4 FY24: Rs.1,071 crore)
- Q4 FY25 EBITDA: Rs.155 crore (up 54% YoY, 5% QoQ)
- Q4 FY25 PAT: Rs.74 crore (Q4 FY24: Rs.29 crore; up 153% YoY)
- Q4 FY25 EBITDA margin: 14.7%
- Specialty Chemicals Q4 EBITDA: Rs.129 crore; margin 27% (highest in 15 quarters)
- Nutrition & Health Solutions Q4 EBITDA: 237% YoY growth; margin 16% in Q4, 14% for FY25
- Net debt as of March 31, 2025: Rs.658 crore
- Net debt-to-EBITDA: 1.18x (vs. 1.36x previous quarter)
- FY25 capex incurred: Rs.365 crore; Q4 capex: Rs.65 crore
- FY26 planned capex: Rs.600 crore
- Net working capital as % of turnover: 17% (Q4 FY25), 18.3% (Q3 FY25)
- Working capital days: 61 (Q4 FY25), 65 (Q3 FY25)
- Dividend for FY25: Rs.5/share (500% of face value), total cash outflow Rs.79.8 crore
- International revenue share: 45% (up from 34% YoY)
- Annualized cost savings from efficiency initiatives: Rs.120 crore; Phase-II target: Rs.100–150 crore
- Specialty & Nutrition share of portfolio: 64% of revenue, 94% of EBITDA (up from 62%/73% last quarter)
- R&D team: 150+ scientists
- cGMP Niacinamide plant capacity: 4,500 tons; targeting 70–80% utilization in 18 months
- Renewable energy: 35% of total needs across all manufacturing units
- ESG: Gold rating, 95th percentile Eco Vadis, 92nd percentile S&P Dow Jones Sustainability Index
CDMO segment revenue: Not disclosed
Breakdown of cost savings contribution to EBITDA: Not disclosed