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 amarket cap of ₹1,615 croreandstock price of ₹413, this company has done what few midcap chemical players can boast — maintain double-digit ROCE (20%) while stayingalmost debt-free(Debt: ₹5.11 crore — basically pocket change).
Quarterly revenue came in at₹220 crore, up3.9% 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 aP/E of 25.8, slightly above the industry average of 22.2, which basically means investors are paying a “Jhunjhunwala premium” for theJhunjhunwala family-controlled zinc monopoly.
And the main highlight? They’ve approved a₹100 crore capexatDahej, Gujarat — adding40,000 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’sJ.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 in2001, the company’s rise is almost Bollywood material — starting small inJangalpur, West Bengal, and now rubbing shoulders withglobal top-5 zinc oxide producers. But the real power move came inMarch 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 aboutsustainability with swagger. They recycle73% secondary zinc, reducing energy use by82%and emissions by70%. 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 theFrench 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.
Theircore segmentsare:
- 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), andNaidupeta (43,704 MTPA)— churn out up to80 gradesof zinc oxide. The Naidupeta plant (throughBDJ Oxides) is the showstopper — theonly 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 take4–5 yearsto 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’soperating leveragestory remains solid. EPS of ₹3.67 annualizes to ₹14.7, translating to aP/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 = ₹14.68Industry P/E (Chemicals average): 22×→Fair Value Range:₹323 – ₹440
B. EV/EBITDA Method:EV = ₹1,572 CrEBITDA (TTM) = ₹80 CrEV/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 foreducational purposes onlyandnot investment advice.
6.What’s Cooking – News, Triggers, Drama
There’s no rest at J.G. Chemicals HQ. Recent board meetings have been spicier than a Kolkata kati roll.
- ₹100 Cr Dahej Expansion (Aug 2025):Adding 40,000 MT capacity — that’s nearly doubling output. Management expects₹900 Cr annual revenue additiononce commercialized. Basically, one Gujarat plant could do what two Bengal plants took 20 years to build.
- Land Acquisitions:
- May 2025:Bought11.43 acres in Dahejfor ₹24.05 Cr — smart move for logistics and port proximity.
- May 2025 (Subsidiary):Bought2.96 acres in Andhra Pradeshfor ₹2.34 Cr — probably phase II of capacity scaling.
- ICRA Monitoring (Nov 2025):IPO proceeds used as planned; ₹40.87 Cr still unutilized — meaning war chest intact.
- CRISIL Rating (Nov 2025):Retained stable rating — sign of steady credit hygiene.
So what’s cooking? Expansion, execution, and efficiency. Basically, the Jhunjhunwalas are quietly building the
