Interview with Jyoti Resins and Adhesives Ltd

The gap between us and the largest player is quite significant and we aim to bridge this gap, even as the market continues to expand, affirms Utkarsh Patel, Executive Director, Jyoti Resins and Adhesives Ltd.

What is your outlook on the Indian adhesives market?

The Indian Adhesives market is expected to grow at 8-10% CAGR over the next 8-10 years. This growing demand is driven by an increasing need for the application of adhesives across categories and substrates thereby leading to organic (existing substrates) as well as inorganic (new substrates) growth options in the market for adhesives. In line with this, our company has also been developing adhesives with several properties such as anti-termite, water-resistant, quick-dry, heat and fungal resistance, cold and hot press application, products for use with PVC and Acrylic sheet bonding to wood and weatherproof adhesives.

Having a complete basket of products with strong service and the ability to supply as per demand are key factors in the adhesives market. We seek to be focused in this category since it's an industry symbolised by one large player followed by us at no 2 and followed by the rest. The gap between us and the largest player is quite significant and we aim to bridge this gap, even as the market continues to expand.

Can you shed some light on your ongoing as well as future capex plans?

We expanded our capacity to 1500 TPM (from 1000 TPM) in November 2021 and are further expanding to 2000 TPM in H1FY23. This capacity should be good to take us to a revenue potential of Rs 450-500 crore over the next 3-4 years. Simultaneously we have also invested in an adjoining land to create storage for raw materials and finished goods. All of this capex together will cost us approximately Rs 30 crore. We expect our asset turnover to continue to stay at 7x-8x.

What are your key growth triggers?

Our key growth drivers are going to be (1) Deeper penetration in existing states (2) Widen our reach in existing states (3) Increasing the number of active dealers and carpenters (4) Keep receivables at acceptable levels (5) Fast track the carpenter redemption programme (6) Focus on increasing the management bandwidth as we get closer to a Rs 300 crore revenue threshold and (7) Identify new states for future growth.

Currently, what are your top 3 strategic priorities?

Our top 3 strategic priorities include increasing our market share through greater penetration and reach, increasing our share of business in OEMs as well as growing sustainably and profitably.