Jyoti Resins — Q1 FY26 earnings call

Call held 13 Aug 2025

Management summary

Jyoti Resins navigated a soft Q1 FY26 marked by a 3% volume decline due to early monsoons, yet achieved an 8.7% revenue growth and maintained a robust 27.5% EBITDA margin. The quarter saw the launch of aggressive brand communication and trade marketing efforts, which are expected to drive future growth. The company is also expanding its brownfield capacity and remains focused on penetrating the domestic market to achieve its INR 500 crore turnover target.

Highlights

  • Reported revenue grew by 8.7% YoY to INR 75 crores in Q1 FY26.

  • Volume declined by 3% YoY in Q1 FY26 due to early monsoons and demand softness.

  • EBITDA margin stood at 27.5% in Q1 FY26, exceeding the long-term guidance of 22-25%.

  • The company plans a brownfield capacity expansion of 1,500 tons per month for less than INR 10 crore, aiming for a total capacity of 3,500 tons per month.

  • Marketing and brand communication spend is targeted at 7-8% of total revenue for FY26.

  • Management aims for INR 500 crore turnover within the next three years and 15-20% annual volume growth.

  • The company is debt-free and holds approximately INR 150 crores in cash and INR 140 crores in fixed deposits.

Concerns

  • Demand Softness due to Early Monsoons

Key financials

  1. Revenue (Reported) ₹75 Cr +8.7%YoY
  2. Volume Growth -3% -3%YoY
  3. EBITDA Margin 27.5%

What they filed

Q1 FY27: revenue up 17.3%, net profit down 29.4% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue65 71 79 75 74 +14%72 +1%93 +18%88 +17%
EBITDA19 22 24 21 20 +5%19 −14%25 +4%13 −38%
Net profit16 19 20 17 17 +6%15 −21%20 +0%12 −29%
How to read this

₹ crore, as filed. The percentage beside a figure is the change against the same quarter a year earlier — never the quarter before, which would make every seasonal business look like it collapses and booms each year.

Capital allocation

high confidence
  • Capex Capex disclosed
    • Brownfield capacity expansion (1,500 tons/month increase) ₹10 Cr
    • Greenfield expansion ₹45 Cr
    We are looking to increase our brownfield capacity by 1,500 tons per month over a period of next 6 to 12 months which will take our total capacity to 3,500 tons per month... The total CapEx expected in this brownfield expansion will totally not be more than INR 10 crore. Further to this, we are trying to scout the land of our next greenfield expansion on the outskirts of the city. As and when we move forward on this, we will keep you updated. Greenfield around INR 45 crores. That will be coming for the not on an immediate basis. That will be done into part to part for that. So, within two years, that INR 45 crores will be investment.
  • Debt Debt disclosed
    As Jyoti Resins, we have always believed about the profitability should be there and we have maintained that from so many years. We are debt free, we are not hiring, we are not taking the debts or any like startup business what they are burning like money like anything.
  • Liquidity Cash ₹150 Cr Includes INR 140 crores in fixed deposits.
    Great. And sir, as far as our balance sheet is concerned, we have INR 150 crores of cash in our balance sheet. And like you said, the CapEx is not more than INR 15 crore, INR 20 crore, right, the cost of CapEx? No, which is why we gave this clarification in the presentation also. And the fact that our cash flows are not negative is clear that we have almost INR 140 crores of fixed deposits sitting with us, you know.

Guidance & targets

Turnover

  • Total Turnover Turnover · next three years · High confidence INR 500 crore
    Overall, we continue to be focused on reaching INR 500 crore turnover mark over the next three years lead by volume growth.

    — Utkarsh J Patel

Profitability

  • Long-term EBITDA Margin Profitability · long-term · High confidence 22-25%
    We also continue to guide for a long-term 22% to 25% EBITDA margin range as we have always done in the past.

    — Utkarsh J Patel

  • FY26 EBITDA Margin Profitability · this year (all 4 quarters) · High confidence 27-28%

    Previously 22-25% → 27-28%

    So, we are I think we are optimistic for the 27% to 28% EBITDA for this year throughout the 4 quarters.

    — Utkarsh J Patel

Volume

  • Annual Volume Growth Volume · every year · High confidence 15-20%
    So, we are targeting ourselves as a 15% to 20% growth at least for the volume every year.

    — Utkarsh J Patel

Capacity

  • Total Capacity Capacity · within 6-12 months · High confidence 3,500 tons per month

    Previously 2,000 tons per month → 3,500 tons per month

    We are looking to increase our brownfield capacity by 1,500 tons per month over a period of next 6 to 12 months which will take our total capacity to 3,500 tons per month...

    — Utkarsh J Patel

Revenue

  • Revenue from new capacity Revenue · post brownfield expansion · High confidence INR 650 crore

    From INR 300 crore today

    Then after investing this INR 8 crore to INR 10 crore into the brownfield, after this 3,500 tons capacity, we can go over our revenue to the INR 650 crores from here. So almost double from here.

    — Utkarsh J Patel

Market Share

  • Market Share in each state Market Share · next years · Medium confidence 25%
    So, it is a thought process that as a brand, as a Euro, this is we want to be present ourselves at least 25% of market share in each state. So, this is the journey what we want to go for next years.

    — Utkarsh J Patel

Marketing Spend

  • Total Marketing Spend as % of Revenue Marketing Spend · entire year (FY26) · High confidence 7-8%

    Previously 2% → 7-8%

    So, we are targeting for 7% to 8% of total revenue for the entire year. So, half will be into the trade marketing and half will be into the brand communication. So, you can consider 4% around of the revenue. No, that was zero because we have started the brand communications from this quarter only. So, before years, we were into the 2% of trade marketing of the revenue, 2% for the trade marketing, the dealer meets, carpenter meets, gathering, etc.

    — Utkarsh J Patel

What to watch in Q2 FY26

Volume Growth Recovery

Next 9 months (Q2-Q4 FY26)
Current -3% YoY in Q1 FY26
Target Recovery towards 15-20% annual growth

Why it matters

Essential for achieving FY26 revenue targets and demonstrating market demand rebound after Q1 softness.

But we have 3 more quarters to cover that and we are optimistic for the -- after Diwali the market will open at that level that we can cover our volume growth.

Risks & concerns

  • Demand Softness due to Early Monsoons

    high

    Q1 FY26 saw softness in demand for wood adhesives due to early monsoons, impacting overall sales volumes and the building construction material industry. Management expects recovery post-Diwali.

    Management acknowledged

  • Impact of Increased Marketing Spend on Short-term Margins

    medium

    Aggressive marketing and brand communication efforts, including celebrity endorsement, are a significant investment (7-8% of revenue for FY26) and could put pressure on margins in the short term, though management is confident in maintaining 27-28% EBITDA for the full year.

    Management acknowledged

  • Slower-than-expected Revenue Growth in New States

    medium

    Analysts questioned the pace of revenue growth in newer states like UP and Delhi despite investments. Management explained that establishing a B2C network takes time (2-3 years) and prioritizes steady, profitable growth over rapid, potentially quality-compromising expansion.

    Analyst acknowledged

Q&A highlights

6 direct
Cash Flow Statement Discrepancy Direct
No, no, Yash, that is not incorrect. Basically, we give it in our -- whenever there is a quarter where the balance sheet is disclosed, we always give a clarification in the presentation that as per the IndAS accounting standard, what is it that is the adjustment in the cash flow because of the changes in the nature of the fixed deposit. And that adjustment, we provide that if we adjust that back, then what would be the correct operating cash flow. Right? So, for example, if you see Q4 FY25, as per the cash flow statement, it is INR 14.7 crores. But then there is adjustment in the non-current financial assets to the tune of INR 2.8 crores. And then there is adjustment in the other bank balance to the tune of INR 30.8 crores. So, when you re-add that back, the correct or the reconciled cash flow from operation is INR 48 crores.

Clarifies a potential red flag regarding negative cash flows on public platforms, explaining it as an accounting adjustment for fixed deposits rather than an operational issue.

Asked by Yash

Capacity Utilization and Expansion Plans Direct
No, no. So right now, it is -- utilization is there, but the maximum capacity is the 85% we can consider for the total capacity. ... So, see, right now it is a 2,000 tons current capacity and we are considered as a 90% efficiency. So, we are increasing this to 3,500 tons. So, it will be almost if we consider the revenue wise right now, we are generating INR 300 crore of revenue with existing plant. Then after investing this INR 8 crore to INR 10 crore into the brownfield, after this 3,500 tons capacity, we can go over our revenue to the INR 650 crores from here. So almost double from here.

Corrects initial capacity utilization figures and provides specific details on brownfield and greenfield expansion plans, including costs, timelines, and projected revenue impact, which are key growth drivers.

Asked by Yash

Reconciliation of Revenue vs. Volume Growth Partial
So, your effective sales which we capture on account of actual sales without any adjustment of redemption is approximately INR 70 crores, right, which is 5% lower versus last year Q1. Last year Q1, the adjusted revenue was INR 74 crores. ... This time, if there is incremental redemption of approximately INR 5 crores, which if we reduce, it comes to INR 70 crores. So, there is a drop of approximately INR 4 crores, which is approximately 5%.

Addresses the apparent discrepancy between a 3% volume decline and 9% reported revenue growth by explaining the impact of redemption adjustments on effective sales, providing a clearer picture of underlying performance.

Asked by Vijay Shah

Impact of Increased Marketing Spend on Margins Direct
See, we have always guided that 22% - 25% EBITDA for the longer term. But right now, as you can see that is 27.5%, we land, and because of the trade marketing aggressively we done into the April and May month. We done the more than 30 dealer meets and several mega meets for our end users also. So that expense is coming to this quarter. But I think 70% - 80% territories is already covered with this trade marketing. So, within these next 9 months trade marketing will be less as compared to the quarter 1. But we will continue about the brand communications what we have guided for that. So, we are I think we are optimistic for the 27% to 28% EBITDA for this year throughout the 4 quarters.

Explains the rationale behind the higher Q1 marketing spend, its impact on current margins, and the expectation for maintaining higher EBITDA margins for the full year despite these investments.

Asked by Smit Gala

Strategy for Export Markets Direct
So, the reason is always it is about the vision. And our vision is to make our Euro Adhesives as a retail segment brand. So, it is already a huge market share lying into India in our current states. So, we don't want to lose our focus, even 1% focus into that. So, we are more focusing into the develop these remaining nine states that we can penetrate more and we can go for at least 25% of market share. ... So, we don't want to do for the going for the overheads. And after one or two or three years of continuous journey, and then we can be to that positions can no, no, no, we now we want to focus into the more domestic. So, we are -- we have that vision that we want to go for the domestic only.

Clarifies the company's strategic decision to prioritize the domestic market over exports, emphasizing the large untapped potential within India and the desire to maintain focus and profitability.

Asked by Yash

Raw Material Price Volatility Direct
See our main raw material is the VAM, vinyl acetate monomer. And the volatility was there in the COVID period. And within this FY'21 to FY'23. And after FY'23, it is go back down to the routine rates. And it is not volatile, if we go about the history of past 10, 15 years. So, it is about to INR 65 to INR 75 per kg around.

Provides assurance regarding the stability of raw material prices, a key concern in the chemicals sector, and details the company's procurement strategy.

Asked by Yash

Secondary Sales and Inventory Management Direct
No, that is the secondary sales only. The tertiary sales is the end-user sales. Secondary is that to the retailers and primary is to the distributor. ... Inventory into the stockist level reported into our books and when stockist deliver the material to the retailers then it goes to the sales.

Clarifies the definition of secondary sales in the context of the reported volume de-growth and explains the company's inventory management model through stockists.

Asked by Prashant Shah

3 min read 5 chapters

Detailed narrative

Q1 FY26 Performance Overview and Market Conditions

Jyoti Resins reported a challenging Q1 FY26, experiencing a 3% year-on-year volume drop in wood adhesives. This decline was primarily attributed to early monsoons and a general softness in demand across the building construction material sector. Despite the volume headwinds, the company's reported revenue grew by 8.7% YoY to INR 75 crores. Management noted that adjusted revenue, after accounting for redemptions, was down 5% YoY to INR 70 crores, compared to INR 74 crores in Q1 FY25. The company maintained a strong EBITDA margin of 27.5%, surpassing its long-term guidance of 22-25%.

Aggressive Marketing and Brand Building Initiatives

In Q1 FY26, Jyoti Resins launched its first-ever comprehensive advertising and marketing campaign, featuring celebrity brand ambassador Mr. Pankaj Tripathi. This initiative included multiple advertisements across major TV channels (AajTak, India TV, CNBC, Zee Business) and digital platforms like Instagram and Facebook. The company projects a total marketing spend of 7-8% of its revenue for FY26, with Q1 seeing particularly aggressive trade marketing efforts, including over 30 dealer and mega meets conducted in April and May across various territories. These efforts are viewed as strategic investments for future growth, with management expecting their impact to materialize in subsequent quarters.

Strategic Capacity Expansion for Future Growth

To support its ambitious growth targets, Jyoti Resins is actively pursuing capacity expansion. A brownfield expansion is underway to increase production by 1,500 tons per month, which will bring the total capacity to 3,500 tons per month within the next 6-12 months. This project requires a capital expenditure of less than INR 10 crore. Management anticipates that this expanded capacity will enable the company to achieve INR 650 crore in revenue, nearly doubling its current INR 300 crore. Additionally, a greenfield expansion with an estimated cost of INR 45 crore is being planned for execution within the next two years.

Focused Domestic Market Penetration Strategy

The company reiterated its core vision to establish Euro Adhesives as a leading retail brand exclusively within the domestic Indian market. It aims to achieve a INR 500 crore turnover within the next three years and secure a 25% market share in each state. Management emphasized the vast untapped potential within India, particularly in developing states like Delhi, UP, West Bengal, Bihar, Jharkhand, Odisha, and Telangana. The strategy involves building a strong B2C network, which has been developed over 18 years, and focusing on direct connections with users and retailers, rather than diverting resources to export markets.

Robust Financial Health and Raw Material Stability

Jyoti Resins maintains a strong financial position, operating as a debt-free company with approximately INR 150 crores in cash and INR 140 crores in fixed deposits on its balance sheet. The company's primary raw material, Vinyl Acetate Monomer (VAM), has demonstrated price stability, ranging from INR 65-75 per kg after normalizing from COVID-era volatility, with maximum variations of 1-2%. The company secures its raw materials through 3-month contracts with existing vendors. Furthermore, receivables have shown improvement, reducing from INR 125-128 crores at March 31 to INR 105-110 crores at the end of Q1 FY26.

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