Jubilant Ingrevia Q1 margin recovery strengthens Agro CDMO and FY27 growth outlook

Q1 FY27 Performance Exceeds Expectations

Anand Rathi Research retained its BUY view on Jubilant Ingrevia following a Q1 FY27 performance that exceeded both its estimates and consensus. Consolidated revenue rose 25 per cent year-on-year and 10 per cent quarter-on-quarter to Rs 13,003 million, a 15-quarter high. EBITDA increased 40 per cent year-on-year and 22 per cent quarter-on-quarter to Rs 1,991 million, while adjusted PAT grew 41 per cent year-on-year and 22 per cent quarter-on-quarter to Rs 1,058 million.

Segment Performance and Margin Recovery

The Q1 FY27 improvement was driven by pricing growth and cost pass-through in Nutrition and Health Solutions and Chemical Intermediates, together with volume levers in Specialty Chemicals from the Agro CDMO contract and Fine Chemicals.

• Specialty Chemicals: Revenue grew 11 per cent year-on-year to Rs 5,327 million and EBITDA margin remained at 26.1 per cent. Pricing pressure in commoditised pyridine was offset by a richer CDMO and Fine Chemicals mix.
• Nutrition and Health Solutions: Revenue grew 36 per cent year-on-year, while margin expanded to 14.8 per cent on stronger niacinamide pricing, higher volumes and the rapid ramp-up of the new plant, which was operating above 50 per cent capacity.
• Chemical Intermediates: Revenue rose 38 per cent year-on-year and margin expanded 641 basis points year-on-year to 10.9 per cent, supported by better realisations and pass-through of higher input costs.

FY27 Guidance and CDMO Growth Outlook

Management reiterated FY27 EBITDA guidance of Rs 7,500–8,000 million, including other income. It expects 70–80 per cent of FY27 earnings to come from Specialty Chemicals and Nutrition and Health Solutions. Chemical Intermediates is expected to contribute 15–20 per cent, or about Rs 1,000 million.

Management indicated that Q2 FY27 Agro CDMO dispatches should be sequentially higher than Q1. However, some contracted volume was deferred by the customer because of elevated raw-material prices. The contract includes full protection intended to preserve communicated EBITDA expectations even if customer offtake is below the full contracted volume.

• Confirmed CDMO molecules increased to 25 from 20 in Q4 FY26.
• The original 20 molecules have peak revenue potential of Rs 15,000 million.
• The wider CDMO and Fine Chemicals opportunity funnel exceeds 100 opportunities with more than Rs 35,000 million of peak potential.
• Pharma and personal-care opportunities are expanding faster than agro CDMO.

Estimate Revisions and Operating Inflection

Anand Rathi raised its FY27 revenue, EBITDA and adjusted PAT estimates by 3.6 per cent, 7.5 per cent and 10.6 per cent respectively. FY28 estimates were largely unchanged, reflecting an expectation that some pricing gains will normalise.

The broker views FY27 as an inflection year as newly commissioned assets generate operating leverage. The outlook is supported by a faster human-grade vitamin B3 ramp-up, firmer Chemical Intermediates pricing, CDMO execution and a multi-purpose plant targeted for completion by the end of calendar year 2026.

Valuation and Target Price

Anand Rathi revised its target price to Rs 980, based on a sum-of-the-parts valuation of FY28 estimated equity value of about Rs 154,336 million. This is equivalent to 17.5 times EV/EBITDA and 30.5 times P/E.

The broker expects Specialty Chemicals to re-rate as Fine Chemicals and CDMO reach about 66 per cent of segment revenue by FY28, with segment margin sustained above 24 per cent and about Rs 11,000 million of CDMO revenue visibility.

Key Risk

The principal identified risk is a delay in CDMO ramp-up execution.