Stock of this specialty chemicals company has zoomed 46% in last three days

Shares of Jubilant Industries hit a record high as they remained locked in the 20 per cent upper circuit on the BSE in Wednesday's intra-day trade in an otherwise weak market

Shares of Jubilant Industries scaled a record high of Rs 875.4,on BSE in Wednesday’s intra-day weak market. The stock was also locked in the 20 per cent upper circuit on the exchange. 

In the past three trading days, the stock of the specialty chemicals company has zoomed 45 per cent after it reported a strong operational performance in December quarter (Q3FY24). 

Jubilant Industries is engaged in manufacturing agri products and performance polymers through its wholly owned subsidiary Jubilant Agri and Consumer Products Limited (JACPL).

The agri products comprises of Single Super Phosphate (SSP) and Crop Growth and Performance Polymers comprises of consumer products such as wood adhesives and wood finishes, and specialty polymers such as Vinyl Pyridine (VP) latex and food polymers.

The company has a broad product portfolio, covering large range of products for both B2C and B2B customers.

In Q3FY24, Jubilant Industries posted a 32 per cent year-on-year (YoY) jump in its consolidated earnings before interest, tax, depreciation, and amortisation (EBITDA) at Rs 267 crore; margin improved 333 bps to 9.1 per cent from 5.8 per cent in the year ago quarter.

The company’s profit before tax and before exceptional items grew 64 per cent YoY at Rs 186 crore. Net sales, however, declined 16 per cent to Rs 2,925 crore.

The adhesives segment of the company has reported a strong double-digit growth, higher EBITDA due to better product mix and lower raw material.

The agri products segment reported de-growth in revenue due to lower demands and excess availability of other phosphatic fertilizers.

The reduction in subsidy – relative price of SSP increased as compared to other phosphatic fertilizers, the company said.

Meanwhile, the board of directors of JACPL in principally approved a restructuring plan, under which its agri products and sulphuric acid business will be demerged in a separate company.

The rationale behind restructuring is to better focus on the performance polymers business. The company will enhance its focus and allocate resources to strengthen its performance polymers business with focus on adhesives business.

Currently SSP dominates the product portfolio, for sustainable growth there is need to diversify into other agri products such as agri nutrients and agro chemicals besides maintaining its dominance in SSP. This demerger will lead to focus approach on our agri business, the company said.