Jyoti Resins

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%.

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.

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.

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.

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.