Anand Rathi starts coverage on Jubilant Ingrevia with 'Buy'; check target

Anand Rathi expects Jubilant's capex cycle to drive a sharp earnings upturn over FY26-28, with consolidated Ebitda seen growing at around a 22 per cent CAGR

Anand Rathi on Jubilant Ingrevia: Domestic brokerage Anand Rathi Share and Stock Brokers has initiated coverage on Jubilant Ingrevia, a diversified chemicals platform, with a 'Buy' rating, citing its premiumisation-led margin expansion and the earnings acceleration unlocked by the recent capex build-out. 

 

According to the brokerage, over the past three years, the company has executed ₹20 billion of strategic capital expenditure (capex) across new multi-purpose plants (MPPs), the expanded Vitamin B3 facility, two additional Bharuch units and 15-20 per cent debottlenecking, creating a materially enhanced asset base now. 

 

Although pricing pressure in the chemicals segment has slowed near-term revenue growth, improving capacity utilisation and the commercialisation of new products are expected to lift monetisation.

 

 

The brokerage expects this capex cycle to drive a sharp earnings upturn over FY26–28, with consolidated Ebitda seen growing at around a 22 per cent CAGR, led largely by Speciality and Nutrition, as CDMO revenues scale up significantly. A broad leadership refresh, expansion in scientific talent, and a strengthened tech-transfer setup have enhanced execution and win rates, supporting a rise in ROCE to over 15 per cent by FY27–28. Despite this earnings inflexion, the stock continues to trade at modest mid-cycle valuations, analysts said.

 

Anand Rathi has set a target price of ₹975, based on a Sum-of-the-Parts (SoTP). The target price implies an upside potential of 35 per cent from the December 23, 2025, closing price of ₹720.9 on the NSE.

 

At 09:45 AM on Wednesday, December 24, the Jubilant Ingrevia stock was trading at ₹722.5, up around 0.22 per cent from the previous session's close. In comparison, the NSE Nifty50 was up 34 points or 0.13 per cent at 26,212 levels. The company's total market capitalisation stood at ₹11,508 crore.  CATCH STOCK MARKET LIVE UPDATES TODAY

Here's why Anand Rathi is bullish on Jubilant Ingrevia:

Portfolio shift towards high-margin engines: Analysts said Jubilant's portfolio is rapidly tilting towards structurally higher-margin engines, with growth now anchored by Speciality Chemicals and Nutrition while Acetyls remains Ebitda-positive despite a deep downcycle due to strong scale and cost position. 

 

Jubilant’s Speciality business is undergoing a structural upgrade, with Fine Chemicals and CDMO (50 per cent of the mix) expected to form nearly two-thirds of the mix by FY27, reducing dependence on volatile pyridine chains. Along with lower power and utility costs, this has doubled Speciality Ebitda to around ₹5 billion, while the Nutrition segment, led by Vitamin B3, adds margin stability and supports sustained earnings improvement.

 

CDMO - Central growth vector now: CDMO has emerged as the key growth driver for Jubilant, with two major contract wins validating its global execution capabilities. The company has secured 12 confirmed molecules with a peak revenue potential of about ₹12 billion and a strong pipeline of over 100 opportunities while CDMO revenues are expected to scale from around ₹3 billion in FY26 to ₹12 billion by FY28, generating more than ₹2.5 billion in Ebitda.

 

Nutrition entering its strongest earnings phase: According to analysts, the new Human-grade Vitamin B3 plant, commissioned in January 2025, is the primary margin driver, wherein utilisation is set to rise to 65 per cent by FY28, from 20 per cent in FY26. This will add ₹2 billion of higher-margin revenue, more than 20 per cent Ebitda. Additionally, Choline Chloride (B4) benefits from EU anti-dumping, enabling Jubilant to target 8-10 ktpa of the 60 ktpa market, albeit at a lower margin compared to B3.

 

Organisation rebuild: A major leadership refresh and expansion in scientific and tech-transfer teams has shifted the company towards a solution-led CDMO model. With sufficient capacity through existing MPP expansions, new Bharuch plants and debottlenecking, alongside disciplined capex focused on high returns, the rising Speciality mix, Nutrition uplift, and rapidly scaling CDMO business are expected to drive sustained margin and earnings expansion.  (Disclaimer: Target price and stock outlook has been suggested by Anand Rathi Share and Stock Brokers. Views expressed are their own.)