Skip to content

    J.G.Chemicals Q4 FY26 earnings call

    JGCHEM
    Chemicals·15 May 2026
    Management Summary

    J.G.Chemicals reported its highest ever annual revenue and EBITDA for FY26, driven by robust demand in the tire sector and strategic capacity expansions. Q4 FY26 saw significant revenue growth, though margins were temporarily impacted by raw material and energy cost spikes. The company is progressing well with its Dahej greenfield project and debottlenecking initiatives, while also expanding its non-rubber portfolio and sustainability efforts.

    Highlights

    6

    • Record annual revenue of ₹972.9 crores and EBITDA of ₹97.9 crores for FY26.

    • Strong Q4 FY26 performance with revenue up 27.6% YoY to ₹286.2 crores.

    • Achieved double-digit volume growth for FY26 and mid-teens for Q4 FY26.

    • Successful commissioning of Phase 1 of the solar power project at Naidupeta, with a payback period of 3-3.5 years.

    • Dahej greenfield project advancing as per plan, expected to add ₹900 crores in sales at full capacity by FY29.

    • Ability to transparently pass on raw material and energy cost increases to customers, effective April 1, 2026.

    Concerns

    3

    • Q4 FY26 EBITDA margins (10.26%) were impacted by a sudden spike in energy prices and higher spot raw material procurement costs in March 2026.

    • Zinc sulphate business remained flat in FY26 due to farmers deferring purchases amidst rising prices, though green shoots are now visible.

    • Geopolitical conflicts caused supply chain disruptions and a temporary freeze in imports from the Middle East in March 2026.

    What Changed3

    vs Q1 FY27

    Guidance items12 → 8 (-4)Risks discussed2 → 3 (+1)Q&A highlights8 → 6 (-2)
    Key financials

    Metrics

    7

    Periods

    2

    Q4 FY26

    4
    • Revenue
      ₹286.2 Cr
      YoY+27.6%
    • EBITDA
      ₹26.8 Cr
    • PAT
      ₹18.9 Cr
    • EBITDA Margin
      10.3%

    FY26

    3
    • Revenue
      ₹972.9 Cr
    • EBITDA
      ₹97.9 Cr
    • PAT
      ₹68.6 Cr

    Capital allocation

    1
    high confidence
    CategoryHeadline
    Capex

    Capex disclosed

    Dahej project funded from internal accruals

    Guidance & targets

    8
    CategoryTargetPriority
    Capacity
    Combined zinc chemical capacity
    exceed 115,000 metric tons per annum
    		High
    Product Development
    Specialized grades of zinc oxide offered
    more than 90
    		High
    Capacity Utilization
    Zinc oxide capacity utilization
    86-87%
    		High
    Project Timeline
    Naidupeta debottlenecking completion
    completely debottlenecked
    		High
    Project Sales Potential
    Dahej facility sales at full capacity
    around INR900 crores
    		High
    Project Utilization
    Dahej plant utilization (H2 FY27)
    35-40%
    		High
    Project Utilization
    Dahej plant utilization (FY28)
    65-70%
    		High
    Profitability
    Blended EBITDA margins
    13-14%
    		Medium

    What to watch in Q1 FY27

    5

    Dahej plant commissioning and utilization ramp-up

    H1 FY27 for commissioning, H2 FY27 for initial utilization
    CurrentCivil construction in advanced stages, equipment installation commenced
    TargetPhase 1 zinc oxide production commissioning as per plan; 35-40% utilization in H2 FY27

    Why it matters

    The Dahej plant is a key growth driver, expected to significantly increase capacity and contribute to non-rubber revenue.

    With the Gujarat project being commissioned during the current financial year, and once both phases at the Dahej plant are on stream by 2029, our combined zinc chemical capacity will exceed 115,000 metric tons per annum... Civil construction at the Dahej site is now in advanced stages, and equipment, plant and machinery installation has also commenced during the quarter as we speak. We continue to target the commissioning of Phase 1 of the zinc oxide production as per plan.

    Risks & concerns

    3
    RiskSeverity

    Geopolitical conflicts and supply chain disruptions

    Geopolitical conflicts led to a temporary freeze in Middle East imports and delays from Europe, forcing spot market procurement at higher LME prices in March 2026. — Management acknowledged

    medium

    Raw material and energy price volatility

    Sudden spike in energy prices and higher raw material costs in March 2026 impacted Q4 margins, though costs are being passed on from April 2026. — Management acknowledged

    medium

    Demand deferral in zinc sulphate due to rising prices

    Farmers deferred purchases of zinc sulphate in FY26 due to continuously rising prices, but demand is now returning as new price levels are accepted. — Management acknowledged

    low

    Q&A highlights

    6

    “From February end and whole of March, we have seen the world being impacted due to the geopolitical conflicts, and this war, which was not expected, obviously has had an impact on our raw material pricing as well. During the month of March, there was a complete freeze in imports from the Middle East and also there were huge delays in shipments from Europe. Hence, raw materials during the month of March had to be procured from the domestic market at a much higher LME which was prevailing at that point. This LME on the sell side would only get affected in April 2026. Moreover, March was also characterized by a sudden spike in energy prices. In line with our long-standing pricing philosophy, all of these incremental costs, including higher freight, energy, and other ancillary costs, have been transparently passed on to all our customers with effect from 1st April 2026 itself.”

    Management explained the reasons for Q4 margin pressure and confirmed transparent pass-through of costs from Q1 FY27, indicating margin recovery.

    asked by Dhiral Shah

    3 min read6 chapters

    Detailed Narrative

    01

    FY26 Financial Performance and Q4 Momentum

    J.G.Chemicals concluded FY26 with its highest-ever annual revenue of ₹972.9 crores, EBITDA of ₹97.9 crores, and PAT of ₹68.6 crores. The fourth quarter of FY26 demonstrated strong momentum, with revenue growing 27.6% year-on-year to ₹286.2 crores, EBITDA at ₹26.8 crores, and PAT at ₹18.9 crores. The company achieved double-digit volume growth for the full year and mid-teens volume growth in Q4, capitalizing on a strong pull-back in demand during the second half of the fiscal year.

    02

    Capacity Expansion and Strategic Projects

    The greenfield project at Dahej is progressing as planned, with civil construction and equipment installation underway. This facility is expected to be commissioned in H1 FY27, with Phase 1 zinc oxide production commencing as per schedule. At full capacity by 2029, the Dahej plant is projected to add approximately ₹900 crores in sales and will increase the combined zinc chemical capacity to over 115,000 metric tons per annum. Additionally, brownfield debottlenecking at the existing Naidupeta plant is expected to be completed by December 2026, further enhancing capacity.

    03

    Non-Rubber Portfolio Expansion and Product Customization

    The company is committed to growing its non-rubber application contribution, focusing on segments like pharmaceuticals, ceramics, specialty chemicals, electronics, and agriculture. While non-rubber growth was modest in FY26, the Dahej plant is strategically located to serve the majority of non-rubber consumption centers in the Gujarat belt, which is expected to be a significant catalyst for future growth in these higher-margin segments. J.G.Chemicals currently offers over 90 specialized grades of zinc oxide, up from 80+ in FY25, emphasizing tailor-made product development.

    04

    Sustainability Initiatives and Cost Management

    J.G.Chemicals commissioned Phase 1 of its solar power generation project at Naidupeta in FY26, investing ₹2 crores with an expected payback period of 3-3.5 years. Further phases of renewable investments are planned for both Naidupeta and Dahej to reduce energy costs and improve ESG scores. Despite geopolitical conflicts leading to raw material supply chain disruption🌐s and a sudden spike in energy prices in March 2026, the company successfully passed on these incremental costs to customers from April 1, 2026, maintaining its long-standing pricing philosophy.

    05

    Recycled Rubber Project Progress

    The company reported significant progress on its recycled rubber project, with pilot trials yielding extremely positive customer feedback. J.G.Chemicals is now actively working on a detailed commercial-scale project for this product and related offerings. This initiative is expected to materially increase the content per tire coming out of J.G.Chemicals, leveraging its strong relationships with tire manufacturers. Further details on capex, capacity, timelines, and revenue potential will be shared at an appropriate time⏳.

    06

    Market Dynamics and Competitive Positioning

    The Indian automotive and tire industries experienced robust demand in Q4 FY26, with tire majors reporting double-digit revenue growth. J.G.Chemicals benefits from this strong cycle, supplying to every major Indian tire manufacturer and 9 out of the top 10 global companies. The company maintains a strong competitive position as the largest zinc oxide player in India, with its Naidupeta facility being the only IATF certified zinc oxide facility globally and holding WHO GMP accreditation, creating significant barriers to entry for competitors.

    This is an AI-generated summary of a publicly available earnings call transcript.