Ace Investor: Can this chemical stock owned by the Big Bull deliver returns going forward?

Jubilant Ingrevia, a speciality chemicals company in the portfolio of Rakesh Jhunjhunwala is expected to double its revenue by FY25.

The company is a global integrated Life Science products and Innovative Solutions provider serving, Pharmaceutical, Nutrition, Agrochemical, Consumer and Industrial customers with its customised products and solutions that are innovative, cost-effective and conforming to excellent quality standards. Jubilant Ingrevia is the demerged pharma and life sciences business of Jubilant Lifesciences and was listed on the exchanges in FY21.

The company offers a broad portfolio of high-quality ingredients that find application in a wide range of industries. The company’s portfolio also extends to custom research and manufacturing for pharmaceutical and agrochemical customers on an exclusive basis. 

As per BSE corporate filings of Jubilant Ingrevia, Ace Investor, Rakesh Jhunjhunwala and wife Rekha Jhunjhunwala together hold a 4.7% stake, combining 7,520,000 shares, in the speciality chemical company. 

The company has planned a capital expenditure of Rs 1200 crore for the next three years for its speciality segment. The Capex has the potential to generate a turnover of Rs 2500 crore. The balance sheet of the company is strong and it has a low debt to equity ratio of 0.2x. 

The company reported a 26.20% increase in the consolidated profit to Rs 68.60 crore for the quarter ended March 2022, in comparison to the same quarter the previous year, which had a profit of Rs 54.36 crore. The company also reported a rise in the revenue from operations by about 87.91% to Rs 1275.87 during the March 2022 quarter from Rs 678.97 crore, which was reported in the same quarter last year. 

The shares of Jubilant Ingrevia touched a 52-week high on October 18, 2021, at Rs 877.95 and a 52-week low on March 8, 2022, at Rs 401.35. On June 24 2022, the scrip ended at Rs 492.65, a gain of 6.35%.