Jyoti Resins — Q4 FY25 earnings call

Call held 9 May 2025

Management summary

Jyoti Resins delivered strong volume and revenue growth in Q4 and FY25, driven by market penetration and strategic initiatives. The company is expanding capacity and investing significantly in brand building with a new ambassador. While receivables saw a temporary increase, management is confident in its B2C model and long-term profitability targets.

Highlights

  • Q4 FY25 volume growth was nearly 15% year-on-year and 24% quarter-on-quarter.

  • FY25 volume growth stood at approximately 12%, driving a 14% year-on-year adjusted revenue growth.

  • The company reported a PAT of INR 70 crores for FY25.

  • Capacity is being expanded by 1,500 tons/month to reach 3,500 tons/month, capable of generating INR 650-700 crores in revenue.

  • Mr. Pankaj Tripathi has been signed as a brand ambassador, with marketing spend targeting 7-8% of revenue.

  • Market share in Gujarat reached 35%, growing by 10% in the last two years (from 25%).

  • Receivables increased to INR 125 crores in March 2025, primarily due to higher March sales, expected to normalize within two months.

Key financials

6 periods

Headline

  • Receivables (March 2025)
    ₹125 Cr
  • Receivables (March 2024)
    ₹94 Cr

Q4 FY25 QoQ

  • Volume Growth
    24%
    QoQ +24%

Q4 FY25 YoY

  • Volume Growth
    15%
    YoY +15%

FY25

  • PAT
    ₹70 Cr
  • Total Volume Sold
    12,400 Tons
  • Revenue
    ₹284 Cr

FY25 YoY

  • Volume Growth
    12%
    YoY +12%

FY25 YoY, adjusted

  • Revenue Growth
    14%
    YoY +14%

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
    • Capacity expansion at existing plant by 1,500 tons per month ₹5 Cr
    • Capacity expansion at existing plant by 1,500 tons per month ₹7 Cr
    In terms of our capacity expansion and CapEx plans, we are looking to add another 1,500 tons per month over end of this financial year at our existing plant that will take us to capacity of 3,500 tons per month. That can generate INR 650 crores of revenue in existing plant. In next two years, we will start to plan for greenfield expansion for future growth. (Page 4) ... We are targeting for actually this end of the year and maybe early than this. It will cost around INR 5 crore to INR 7 crores max. (Page 12)
  • Debt Debt disclosed
    So, this is the reason that we rotate that cycle in a proper timeline since long years. So, and we have right now 17 years invested into this business and that model, I have explained about that 48 stockist, that 90% revenues generated by this channel partner. (Page 10)
  • Liquidity Cash ₹147 Cr The company has a fixed deposit of INR 147 crores, which is considered an asset to service the loyalty program liability of INR 95 crores.
    See the company already has a fixed deposit of INR 147 crores. So, we have basically created on this base an asset on the balance sheet where we can serve INR 95 crores regularly or redeem it. (Page 18)

Guidance & targets

Revenue Growth

  • Revenue Growth Revenue Growth · FY26 · High confidence 20-25%
    We are targeting, as I mentioned that 20% to 25% of revenue growth. So, we can say that INR 360 crore, INR 370 crores we are targeting for that.

    — Utkarsh J Patel

Revenue

  • Revenue Target Revenue · FY27 · High confidence INR 450-500 crores
    So yeah, so we are targeting for the INR 450 crore or INR 500 crore of revenue in 2027.

    — Utkarsh J Patel

Volume Growth

  • Volume Growth Volume Growth · Upcoming three years · High confidence 25%
    So, we are targeting 25% volume growth. And as I said, our efforts are also in that direction. And if we are working with a good profitability with 25% growth, then we will reach very close to our target of INR 500 crores.

    — Utkarsh J Patel

EBITDA Margin

  • EBITDA Margin EBITDA Margin · Longer term · Medium confidence 22-25%
    So, as I mentioned that we have now target for the 7% to 8% into the brand communications and trade marketing. So, I have always guided for the 22% to 25% of EBITDA in a longer term.

    — Utkarsh J Patel

  • EBITDA Margin EBITDA Margin · Longer term · Medium confidence 25-28%
    So, these maybe if the gross margin remains same and raw material prices remain same, so we can come to the maybe 25% to 28% of EBITDA we can say.

    — Utkarsh J Patel

Marketing Spend

  • Marketing and Branding Spend as % of Revenue Marketing Spend · Upcoming year · High confidence 7-8%
    So, we are targeting 7% to 8% of revenue. And that will be led by half is trade marketing and half for the brand communications.

    — Utkarsh J Patel

Capacity

  • Total Capacity Capacity · End of FY25 · High confidence 3,500 tons per month
    We are looking to add another 1,500 tons per month over end of this financial year at our existing plant that will take us to capacity of 3,500 tons per month.

    — Utkarsh J Patel

Revenue Potential

  • Revenue Potential from Expanded Capacity Revenue Potential · Post-expansion · Medium confidence INR 650-700 crores
    That can generate INR 650 crores of revenue in existing plant. (Page 4) ... So, if we do for the 3,500 ton, then 3,000 ton we can expect. So, it is INR 650 crores of revenue. (Page 12) ... So, that can go to the INR 700 crores. (Page 20)

    — Utkarsh J Patel

B2B Revenue Contribution

  • B2B Revenue Contribution B2B Revenue Contribution · Next 2-3 years · Medium confidence 10-15%
    So right now, 5% of our revenue come from this model and maybe it will be go to the 10% to 15% B2B will get in next 2, 3 years.

    — Utkarsh J Patel

What to watch in Q1 FY26

Capacity Expansion Completion

End of FY25 or earlier
Current Underway, adding 1,500 tons/month
Target Commercial operations of new capacity (3,500 tons/month total)

Why it matters

Crucial for achieving FY27 revenue targets and realizing INR 650-700 crores revenue potential from expanded capacity.

We are looking to add another 1,500 tons per month over end of this financial year at our existing plant that will take us to capacity of 3,500 tons per month.

Risks & concerns

  • Receivables Increase

    medium

    Receivables jumped from INR 94 crores to INR 125 crores YoY, but management attributes this to higher March sales and normal B2C credit cycles, expecting normalization within two months with low bad debt risk (<1%).

    Analyst downplayed

  • Competition from New Entrants

    medium

    New players like Astral and Asian Paints are entering the segment, but management believes Euro's specialized focus on white glue and multi-functional solutions provides differentiation.

    Analyst acknowledged

  • Raw Material Price Volatility (VAM)

    low

    VAM prices saw a slight 3-4% rise recently, but management expects to pass this on to maintain margins, noting VAM prices are generally stable.

    Analyst acknowledged

Q&A highlights

7 direct
Receivables jump and credit policy Direct
So, yes, you are very right that from INR 94 crore to INR 125 crores in this March balance sheet, the reason is we have generated a very higher volume in March month and that was around INR 47 crores. So, this is the reason that this jump at this level. But this will be again came back within these two months because it's see in B2C, in this trade business, it is generally 70 to 90 days, 100 days is expected by the retailers.

Analyst questioned a significant increase in receivables (34% YoY) relative to revenue growth, and management clarified it's a temporary effect of high March sales and typical B2C credit cycles, with low bad debt risk.

Asked by Keshav Garg

Strategy for new states (UP, Delhi) penetration Direct
So, first of all, as I told you, we are working with 90% of the stockist model. And we are working with this model in all the major megacities and big cities there. And in UP, we have now done six branches, where it is Lucknow, Jhansi, Agra, Banaras, Gorakhpur. And right now, we have placed in 450 counters in the entire UP. And in Delhi, we have placed in 150 counters. So, we have placed in 600 counters in UP and Delhi.

Analyst inquired about the company's model and progress in new geographies like UP and Delhi, leading to a detailed explanation of their stockist model, branch network, and retail counter penetration.

Asked by Mahesh Atal

Loyalty program liability and asset creation Partial
See the company already has a fixed deposit of INR 147 crores. So, we have basically created on this base an asset on the balance sheet where we can serve INR 95 crores regularly or redeem it. But this also is not going to come in a single day. It is not going to come in one day or within one month, generally.

Analyst questioned how the INR 95 crore loyalty program liability on the balance sheet is serviced, and management explained it's backed by fixed deposits and redeemed over time, not in a lump sum.

Asked by Manan Shah

Competition from Astral and Asian Paints Direct
So as a Euro, we have differentiated ourselves as a multifunctional glueing solutions what we are on that. So, the elements what we have added that differentiate ourselves. Our tagline is that “Sirf jodo nahi, fayedon ke saath jodo”. So, we are giving the waterproof, anti-termite, weatherproof, fast drying, high coverage solutions.

Analyst asked about the threat from new entrants like Astral and Asian Paints, and management highlighted Euro's specialization in white glue and its differentiated product features as competitive advantages.

Asked by Piyush

Capacity expansion and revenue reconciliation Direct
No. So, it is 3,000 tonnes. So, if you multiply it by INR 230, so that will be 36,000 tonnes and INR 230 per kg. So, that will become INR 650 crores.

Analyst sought clarification on the revenue potential from the expanded capacity, leading to a detailed explanation of the calculation based on tons, realization per kg, and utilization rates.

Asked by Anupam Agarwal

Marketing spend and brand ambassador impact Direct
Yes, immediately effect but that is a different strategy for that and the contract is for the 3 years. So, the 6% to 7% what we are targeting for the yearly wise for that.

Analyst inquired about the immediate impact and duration of the increased marketing spend and brand ambassador engagement, confirming a 3-year contract and immediate effect on strategy.

Asked by Pritesh Chedha

B2B business plans and contribution Direct
We have created this model already and that is the modular furniture makers. So right now, 5% of our revenue come from this model and maybe it will be go to the 10% to 15% B2B will get in next 2, 3 years.

Analyst asked about the company's B2B strategy, revealing its current contribution to revenue and future growth targets for this segment.

Asked by Vasu Patel

Accounting for loyalty program liability Direct
Yeah. So as per Ind AS revenue recognition, as and when these points get redeemed, all of this eventually will come in the revenue as well as other expenditures. Yeah. As and when it gets redeemed. So, it is effectively an absolute EBITDA neutral event when it gets redeemed.

Analyst questioned the accounting treatment of the INR 95 crore loyalty program liability, specifically whether it had been expensed, and management clarified it's treated as deferred revenue/expense, becoming EBITDA neutral upon redemption.

Asked by Rajat Sethia

2 min read 6 chapters

Detailed narrative

Q4 & FY25 Performance Highlights

Jyoti Resins reported strong performance for Q4 FY25, with volume growth of nearly 15% year-on-year and 24% quarter-on-quarter. For the full fiscal year 2025, volume growth was approximately 12%, contributing to a 14% year-on-year increase in adjusted revenue. The company achieved a PAT of INR 70 crores for FY25, with total volume sold reaching 12,400 tons. Realization per unit remained largely flattish compared to the previous year.

Capacity Expansion and Future Outlook

The company is actively pursuing a brownfield capacity expansion, aiming to add 1,500 tons per month to its existing plant, which will bring the total capacity to 3,500 tons per month. This expansion, costing between INR 5-7 crores, is expected to be completed by the end of the current financial year. This increased capacity is projected to support a revenue potential of INR 650-700 crores at 85% utilization, aligning with the company's FY27 revenue target of INR 450-500 crores.

Brand Building and Market Penetration Strategy

Jyoti Resins has onboarded Mr. Pankaj Tripathi as its brand ambassador to enhance national visibility and confidence among its stakeholders. The company plans to dedicate 7-8% of its revenue to marketing and brand communications. Aggressive ground-level activities, including carpenter and dealer meets, are being conducted to improve penetration in existing markets and establish a strong presence in new states such as Uttar Pradesh, Delhi, West Bengal, Chhattisgarh, and Telangana.

Market Share and Distribution Network

The company has demonstrated significant market share gains, particularly in Gujarat, where its share has grown by 10% over the last two years to reach 35%. Jyoti Resins operates through a stockist model with 48 branches across 14 states, serving approximately 12,500 retailers. The goal is to expand the retailer base to 25,000-30,000 over the next four to five years, focusing on deep penetration within each territory.

Receivables and Loyalty Program Management

Receivables increased from INR 94 crores in March 2024 to INR 125 crores in March 2025, primarily due to higher sales volumes in March. Management clarified this is a temporary effect of the B2C business model's 70-100 day credit cycle and expects normalization within two months, with a historical bad debt rate below 1%. The company's INR 95 crore loyalty program liability is backed by INR 147 crores in fixed deposits, and redemptions are managed through a digital app, making the accounting impact EBITDA neutral upon redemption.

B2B Segment and Competitive Differentiation

The B2B segment, catering to modular furniture makers, currently accounts for 5% of the company's revenue, with a target to grow to 10-15% in the next 2-3 years, despite slightly suppressed margins. In a competitive landscape with new entrants like Astral and Asian Paints, Jyoti Resins differentiates itself by focusing solely on white glue and offering multi-functional solutions that are waterproof, anti-termite, weatherproof, fast-drying, and provide high coverage, emphasizing quality and service over just strength.

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