🧵 At a Glance
Jyoti Resins quietly glued itself into the ₹1,600 Cr club with Euro 7000, now the second-largest retail white adhesive brand in India. With a 56% profit CAGR, 50% ROCE, and zero debt, it’s a cash machine. But with 161 debtor days and 7x P/B, is this resin melting under its own heat?
1. 🎬 Introduction – From Obscure Glue to Retail Cue
No flashy TV ads. No fevicol elephant.
Just consistent compounding and clean margins.
Jyoti Resins has:
- Outpaced Pidilite in 5Y profit CAGR (56% vs ~11%)
- Maintained ROCE >50% for 3 straight years
- Zero debt, minimal capex, and strong dividend yield
- Still operates like a stealth bomber in a crowded market
But does boring = brilliant? Or is this smallcap now priced for perfection?
2. 🏭 WTF Do They Even Do?
🧪 They manufacture synthetic resin adhesives, primarily:
- White wood glues (Euro 7000 brand)
- Used in: plywood, furniture, carpentry, modular work
- Competes with: Pidilite (Fevicol), Jubilant, Astral-Adhesives
🛠️ Segment Positioning:
- Retail Focused (B2C) = sticky margins
- Low CAPEX, High Brand Recall
- Ranked #2 in India for white glue (retail)
Fun fact: Euro 7000 was launched in 2006 and took 17 years to become “visible” to most investors.
3. 💰 Financials Overview – Sticky Profits Galore
| FY | Revenue (₹ Cr) | Net Profit (₹ Cr) | OPM (%) | ROCE (%) | ROE (%) |
|---|---|---|---|---|---|
| FY20 | ₹74 | ₹8 | 16% | 57% | 47% |
| FY22 | ₹182 | ₹20 | 13% | 46% | 43% |
| FY24 | ₹257 | ₹67 | 33% | 66% | 45% |
| FY25 | ₹284 | ₹74 | 31% | 50% | 37% |
📈 5-Year Revenue CAGR: 31%
📈 5-Year Profit CAGR: 56%
🧼 Zero debt. Repeat: zero.
🎯 EPS FY25: ₹61.6
Margins have been on a tear since FY22 — OPM jumped from 13% to 33% in two years!
4. 📦 Valuation – Bubblegum or Bubble?
| Metric | Value |
|---|---|
| Market Cap | ₹1,634 Cr |
| P/E | 22.1x |
| P/B | 7.13x |
| EV/EBITDA (Est.) | ~15x |
| Dividend Yield | 0.66% |
Fair Value Range:
| Basis | Assumptions | Range (₹) |
|---|---|---|
| P/E (16–20x on FY25 EPS ₹61.6) | Smallcap adhesive peer avg | ₹985 – ₹1,230 |
| EV/EBITDA (12–15x on est. ₹100 Cr EBITDA) | Stable margin scenario | ₹1,050 – ₹1,280 |
| DCF (18% growth, 11% WACC) | Conservative | ₹1,100 – ₹1,350 |
🧮 EduFair™ Range: ₹985 – ₹1,300
Current Price: ₹1,362 = Slightly above sticky sanity.
5. 🗞 What’s Cooking – Updates, Events, CSR Glue
- 🏥 June 2025: Formed a ₹1 lakh CSR trust, “Jyoti Social Welfare Foundation”
- 👥 Multiple investor meets: Elephant Asset Mgmt, others in May 2025
- 🧑🔧 Business continues to be 1-brand focused — no new products or M&As
- 💬 Concalls are regular, but very little “growth talk” = cautious optimism or deliberate stealth mode?
6. 🧾 Balance Sheet – Debt-Free, Drama-Free
| Metric | FY25 |
|---|---|
| Equity Capital | ₹12 Cr |
| Reserves | ₹217 Cr |
| Total Assets | ₹368 Cr |
| Borrowings | ₹0 Cr (yes, still) |
| Fixed Assets | ₹48 Cr |
| Net Cash Flow (FY25) | ₹+12 Cr |
There’s no leverage, no capex burden, and no “build it and they will come” delusion. That’s rare.
7. 💵 Cash Flow – Glue That Doesn’t Run
| FY | CFO (₹ Cr) | CFI (₹ Cr) | CFF (₹ Cr) | Net Cash |
|---|---|---|---|---|
| FY23 | ₹1 | ₹-0 | ₹-3 | ₹-2 |
| FY24 | ₹27 | ₹5 | ₹-7 | ₹24 |
| FY25 | ₹15 | ₹8 | ₹-11 | ₹12 |
Nothing flashy — just strong ops, steady reinvestment, and a few rupees kept aside in the wallet.
8. 📊 Ratios – Sexy or Stressy?
| Metric | FY25 |
|---|---|
| ROCE | 50.0% |
| ROE | 37.4% |
| OPM | 31% |
| PAT Margin | ~26% |
| Debtor Days | 161 😬 |
| CCC | 128 Days |
| Inventory Days | 28 |
| Debt/Equity | 0.0 |
🧠 Great margins, but cash conversion cycle has worsened — debtor days up from 128 to 161.
9. 📈 P&L Breakdown – Minimalism Meets Margin
- FY25 Revenue: ₹284 Cr
- EBITDA: ~₹89 Cr
- PAT: ₹74 Cr
- EPS: ₹61.57
- Dividend Payout: 15%
With zero capex or brand expansion, every ₹1 of revenue prints disproportionate profit.
10. 🔍 Misc – Shareholding, Float & Retail Love
| Category | Mar 2025 |
|---|---|
| Promoters | 50.83% (Stable) |
| FIIs | 0.10% (tiny) |
| DIIs | 0.77% (started nibbling) |
| Public | 48.3% |
| No. of Shareholders | 50,341 (up from 8,776 in 2022) |
🧠 Over 5x retail growth in 2 years = everyone’s watching now. That stealth compounder vibe? Gone.
✅ EduInvesting Verdict™
Jyoti Resins is that kid who quietly topped the class while others were flexing on Instagram.
- Profit growth? ✅
- Brand strength? ✅
- Clean balance sheet? ✅
- Valuation? Getting warm.
- Debtors? A mild headache.
So is this a Fevicol moment or just a one-product wonder?
We’re not saying apply, remove, or hold.
We’re just saying:
Even the strongest glue needs time to dry. Read the label, check the ratios.
✍️ Written by Prashant | 📅 28 June 2025
Tags: Jyoti Resins, Euro 7000, Adhesive Stocks, Specialty Chemicals, High ROCE Smallcaps, EduInvesting, Debt-Free Stocks India
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