1. At a Glance
The zinc oxide don of India, J.G. Chemicals Ltd, just dropped its Q2 FY26 results, and the numbers scream consistency with a side of ambition. At a market cap of ₹1,615 crore and stock price of ₹413, this company has done what few midcap chemical players can boast — maintain double-digit ROCE (20%) while staying almost debt-free (Debt: ₹5.11 crore — basically pocket change).
Quarterly revenue came in at ₹220 crore, up 3.9% QoQ, while PAT slipped slightly to ₹15 crore (down 12.8% QoQ). That’s the corporate equivalent of missing your gym PR by half a kilo — impressive but not Insta-worthy. The stock trades at a P/E of 25.8, slightly above the industry average of 22.2, which basically means investors are paying a “Jhunjhunwala premium” for the Jhunjhunwala family-controlled zinc monopoly.
And the main highlight? They’ve approved a ₹100 crore capex at Dahej, Gujarat — adding 40,000 MT capacity, expected to ramp up annual revenue by ₹900 crore (yes, a potential 100% jump). That’s the kind of math that makes both auditors and investors raise an eyebrow… and then smile.
2. Introduction
Imagine a metal that makes your tyres stronger, your paints shinier, your creams smoother, and your batteries last longer. Now imagine one company sitting atop 30% of India’s entire production of that metal oxide. That’s J.G. Chemicals — the zinc oxide emperor with three factories, one IPO, and a dream big enough to coat every tyre from MRF to Michelin.
Founded in 2001, the company’s rise is almost Bollywood material — starting small in Jangalpur, West Bengal, and now rubbing shoulders with global top-5 zinc oxide producers. But the real power move came in March 2024, when they hit the markets with a ₹221 crore IPO, and the Jhunjhunwalas — a family with business genes, not the Dalal Street ones — became a household name in the chemicals circuit.
Today, J.G. Chemicals is not just about zinc oxide — it’s about sustainability with swagger. They recycle 73% secondary zinc, reducing energy use by 82% and emissions by 70%. Basically, they’re saving the planet while selling to nine of the top ten global tyre giants. Ever seen a “green” manufacturer flex this hard?
3. Business Model – WTF Do They Even Do?
J.G. Chemicals has one product that runs half the industrial world — zinc oxide. It’s the white powder that holds rubber together, makes paint last, and adds life to cosmetics. Their business model is simple:
- Source zinc (mostly recycled).
- Process it using the French process (the globally preferred method for high-purity output).
- Supply it directly to end customers — 95% of their sales are direct, no distributors cutting margins.
Their core segments are:
- Rubber & Tyres (90%) – They are practically the Michelin-star supplier of the tyre world.
- Pharma & Chemicals (7%) – Think ointments, creams, and pharmaceuticals where zinc oxide keeps bacteria away.
- Agriculture, Paints, and Others (3%) – The leftover zinc party.
Their three facilities — Jangalpur (14,400 MTPA), Belur (1,800 MTPA), and Naidupeta (43,704 MTPA) — churn out up to 80 grades of zinc oxide. The Naidupeta plant (through BDJ Oxides) is the showstopper — the only IATF-certified zinc oxide unit in India, preferred by tyre OEMs.
So, what’s the secret sauce? High purity, quick approvals, and deep relationships. Tyre manufacturers take 4–5 years to approve suppliers, meaning switching is harder than getting a Blue Tick on X.
4. Financials Overview
| Metric | Latest Qtr (Sep 2025) | YoY Qtr (Sep 2024) | Prev Qtr (Jun 2025) | YoY % | QoQ % |
|---|---|---|---|---|---|
| Revenue (₹ Cr) | 220 | 212 | 218 | 3.8% | 0.9% |
| EBITDA (₹ Cr) | 18 | 21 | 20 | -14.2% | -10.0% |
| PAT (₹ Cr) | 15 | 17 | 16 | -11.8% | -6.3% |
| EPS (₹) | 3.67 | 4.21 | 4.02 | -12.8% | -8.7% |
Commentary:
Margins softened a bit this quarter — EBITDA at 8% vs. double digits earlier — thanks to higher raw material costs. But even then, the company’s operating leverage story remains solid. EPS of ₹3.67 annualizes to ₹14.7, translating to a P/E of ~28, a shade spicy, but hey — leadership has its price tag.
5. Valuation Discussion – Fair Value Range Only
Let’s break this zinc down:
A. P/E Method:
Annualized EPS = ₹3.67 × 4 = ₹14.68
Industry P/E (Chemicals average): 22×
→ Fair Value Range: ₹323 – ₹440
B. EV/EBITDA Method:
EV = ₹1,572 Cr
EBITDA (TTM) = ₹80 Cr
EV/EBITDA = 19.6×
Peer median = 15×
→ If re-rated to peer range: Fair EV ≈ ₹1,200–₹1,400 Cr
→ Implied Fair Value per share = ₹315 – ₹370
C. DCF Method (simplified):
Assume 12% CAGR for next 5 years, WACC 10%, terminal growth 4%.
→ Fair Value Range = ₹340 – ₹460
📘 Educational Disclaimer:
This fair value range is
