Company Overview
Jubilant Ingrevia Ltd, part of the Jubilant Bhartia Group, was created through the demerger
of Jubilant Life Sciences' chemical division in 2021. It specializes in life science chemicals,
with vertically integrated manufacturing across five sites in India producing over 165
products
Business Segments
The company operates across three main segments:
• Specialty Chemicals: Includes pyridine derivatives, diketene derivatives,
pyrithiones, and custom manufacturing (CDMO). Jubilant is among the global leaders
in pyridine, with recent expansions into diketene chemistry and pyrithione for
personal care.
• Nutrition & Health Solutions: Produces Vitamin B3 (niacinamide, nicotinic acid) and
Choline Chloride (Vitamin B4), serving human and animal nutrition markets. Jubilant
is globally the second largest Vitamin B3 producer and has recently entered food-
grade markets.
• Chemical Intermediates: Produces bulk chemicals such as acetic anhydride and
ethyl acetate. It leverages backward integration (ethanol from molasses) for cost-
effective operations and dominates global acetic anhydride production
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Industry Overview
The specialty chemicals industry globally has seen sustained growth driven by demand from
pharmaceuticals, agrochemicals, personal care, nutrition, and various industrial sectors.
Jubilant operates at the intersection of these markets, each with distinct demand drivers and
growth trajectories.
Agrochemicals have historically been cyclical, currently impacted by an oversupply due to
excess inventory buildup, particularly from Chinese exports. Despite this volatility, the
fundamental long-term demand for crop protection chemicals remains strong due to global
food security needs.
The pharmaceutical segment offers stability and consistent growth driven by healthcare
needs and the continuous rise in generic and specialty medicines. Jubilant's
pharmaceutical-related intermediates are well-positioned to benefit from ongoing
outsourcing trends by global pharmaceutical companies.
Nutrition and health solutions have faced recent pricing pressures, notably in vitamin
markets due to oversupply issues. However, this segment also benefits from growth trends
driven by rising global awareness of preventive healthcare, increased consumption of
nutritional supplements, and functional foods. Jubilant's recent investments in high-purity,
food-grade vitamins align with these demand trends.
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The demand for critical intermediates like acetic anhydride is stable, supported by
diversified applications in pharmaceuticals, textiles, and industrial sectors.
The ongoing "China+1" strategy, adopted by global manufacturers to diversify supply chains
and reduce dependency on China, presents significant growth opportunities for Indian
chemical companies like Jubilant
All the major end sectors for the company’s products have steady growth expectations for
the next 5 years
Competitive Analysis
Key competitors differ by segment and most of this competition is global in nature
• Pyridine Derivatives: Vertellus (USA) and Red Sun (China) dominate alongside
Jubilant. Jubilant’s advantage is green, bio-based manufacturing with cost benefits.
• Vitamin B3: Competitors include Lonza (Europe) and Brother Enterprises (China).
Jubilant differentiates through backward integration and new premium-grade
capacities.
• Choline Chloride: Competes mainly with Balchem (USA) and Chinese producers.
• Diketene Derivatives: Laxmi Organic (India) is a primary competitor. Jubilant
differentiates through new flexible, multi-product plants.
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• Acetyls: Faces global majors like Celanese, but Jubilant benefits from bio-based
production and backward integration.
Companies such as Lonza in the specialty chemicals space have an average of 20%
operating margin. In the commodity chemicals space most companies have high single digit
to low double-digit margins over the entire cycle. In an upcycle, companies may enjoy higher
margin, but this usually drops when the cycle turns
As a result, most companies have low ROC in the commodity space. This is also the reason
for Jubilant to focus on the Specialty chemicals space.
Capital Expenditure
Jubilant has embarked on a significant ₹2000 cr capital expenditure program over FY22-25
for expanding production capabilities and moving into higher-value-added product
segments. Major initiatives include:
• A new multi-purpose specialty chemicals plant at Bharuch dedicated to
agrochemical intermediates and actives, designed for flexibility in multi-step
chemistry and enabling the company to rapidly adapt to shifting market demands.
• Expansion of diketene derivatives capabilities at Gajraula, designed to produce a
diversified range of derivatives for coatings, personal care, and polymers,
significantly enhancing Jubilant’s specialty portfolio.
• Construction of a new Vitamin B3 plant at Bharuch specifically for food-grade and
cosmetic-grade niacinamide. This plant positions Jubilant to capture growing global
demand in higher-margin, regulated markets like infant nutrition and premium
cosmetics.
• Additional acetic anhydride production capacity to support global market share
growth, taking advantage of Jubilant’s cost-effective bio-based production processes
and captive raw material supply chain.
These expansions are expected to increase specialty and nutrition segment revenues and
margins, enhance overall profitability and reduce business cyclicality by FY26.
Financial Performance
Revenue grew from ₹3170 Cr (FY20) post spinoff to ₹4136 Cr (FY24. EBITDA margins have
been between 11%-18%, with the drop in the last 2 years mainly due to oversupply in the
agrochemical sector from China. The same has occurred in the nutrition segment too
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Inspite of margin pressures the company has maintained its work capital at the same levels.
The cash flow conversion has been in excess of 80% and the company has re-invested this
cash flow into the new capex. The company has raised a small amount of debt for its capex
plans and as a result the balance sheet has low debt (Debt/Equity ~0.27).
The return on capital is 12% and management expects it to improve to 17-20% as the
company moves away from the commodity chemicals space
Management Assessment
The Jubilant group promoters Shyam and Hari Bhartia have a track record of building
successful businesses across various sectors such as QSR, pharma and chemicals.
The recent appointment of Deepak Jain, a senior partner at Bain & Company, as CEO, has
been done to bring in professional management at the senior levels. Each of the business
segments has individual leaders with considerable experience in that space. Some of these
leaders are from within the company and others have been recruited to fill a skill gap in the
company
Capital allocation record: Management has been improving its capital allocation
performance over the last few years. It is moving from low value add/ROC businesses to
higher ROC businesses (specialty chemicals). Also, these investments have been made
through the company’s operating cash flow without adding much debt
Shareholder communication: appears adequate. Management communicates regularly
with investors via annual report, quarterly updates and conference calls. On the conference
calls, they are open about the prospects of the company. It had an investor meet in Jan 2025
where the senior leadership discussed the company’s performance and detailed plans for
achieving the next 5-year goals
Accounting practices: appear reasonable
Strategic Direction and goals
The company has announced a 345 plan – 3X revenue, 4X EBDITA and 5X net profit in the next
5 years. This translates into 25% topline and 38% net profit CAGR over the next 5 years
The company wants to transform into a high-margin specialty chemicals and nutrition-
focused player, reducing cyclicality and enhancing profitability. Key pillars are:
• Increasing the share of specialty chemicals and nutrition products through targeted
investments, particularly in higher-value segments such as custom agrochemical
actives and high-purity vitamins.
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• Strengthening customer relationships and securing long-term supply agreements
(CDMO) to ensure steady utilization rates and predictable revenue streams. The
company has already received two CDMO contracts in the last one year
• Achieve 3X revenue in the specialty chemicals space with 25% margins
• Achieve 3X revenue in the Nutrition space with 20% margins
• Focusing on continuous innovation and R&D to regularly introduce new high-value
products, leveraging existing chemistries and capabilities to efficiently enter new
market segments.
• Enhancing operational efficiency through digital initiatives, including advanced
process controls, predictive maintenance, and data-driven decision-making, to
improve asset utilization and cost efficiency (Project Lean which will save 125 Cr in
FY25 with plans to save 100+ Cr every year)
The slide below shows the product level plans for each of the three segments
As a result, the company expects the revenue mix to shift to higher margins, specialty and
nutrition products. The company is also targeting a higher revenue in the developed markets
of the US and EU
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Key Risks
The company operates in the agrochemical space which is cyclical in nature. Also, there is
competition from China with aggressive pricing for the commodity chemicals.
As the company expands in the Pharma and GMP space, the company has higher
compliance risks from FDA. Finally, the company also faces operational risks due to the
hazardous nature of its products
Management has an aggressive 5-year plan and has made the necessary investments to
transform the business from a commodity to a specialty chemicals business. The company
faces execution risks to achieve the necessary results. Also, a slowdown in the global
economy, especially the US due to tariffs and other uncertainties, could delay these goals
Scenario analysis
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Hypothesis 1: Management expects 20%+ CAGR growth and operating margin improves to
17-18% as per management 5-year guidance
Hypothesis 2: This scenario assumes the top end of the management’s 5-year goals in terms
of topline and operating margin
Hypothesis 3: This is the pessimistic scenario where topline grows 10-11% and margin has
limited improvement to 14-15% due to ongoing over supply issues from China
Conclusion
Jubilant Ingrevia Ltd., established in 2021 through a spin-off from Jubilant Life Sciences, is
part of the Jubilant Bhartia Group. It operates in specialty chemicals, nutrition solutions, and
chemical intermediates, producing over 165 products across five integrated manufacturing
sites in India.
The company is a global leader in pyridine derivatives and Vitamin B3, emphasizing cost-
effective, bio-based production. Its business aligns with growing sectors including
pharmaceuticals, nutrition, agrochemicals, and industrial intermediates, benefiting from
global trends like the "China+1" strategy.
Jubilant has initiated significant capital expenditures totaling ₹2000 crore (FY22-25) aimed
at expanding specialty and nutrition segments to reduce cyclicality and increase margins.
The company is also scaling the CDMO business in specialty chemicals and has received
two large contracts with 3-4 more opportunities under discussion.
The company plans to triple revenue and significantly enhance profitability within five years,
which will be the key factor for us to track
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