Jyoti Resins & Adhesives Ltd. Navigates Monsoon Challenges with Strategic Growth and Brand Building

Jyoti Resins & Adhesives Ltd., operating under the well-known Euro 7000 brand, has demonstrated resilient performance in the second quarter and first half of the financial year 2026, despite facing an extended and heavy monsoon season across several states. The company reported a robust 20% year-on-year volume growth for H1 FY26, a significant achievement given the soft demand and disruptions in dispatch and delivery chains caused by the weather. This volume growth also translated into a 20% year-on-year increase in gross revenue, excluding GST. While the reported Net Sales growth was 14.0% for Q2 FY26 and 11.2% for H1 FY26, management clarified that the difference was primarily due to adjustments related to carpenter rewards and the base effect from the previous year, an area they are working to enhance transparency on with auditors.

Profitability metrics saw some compression, with the EBITDA margin standing at 27.5% for both Q2 and H1 FY26. This is in line with the company's broad margin guidance but represents a decline from 29.7% in Q2 FY25 and 31.9% in H1 FY25. The management attributed this to strategic investments in higher advertising spend for TV, digital, and trade marketing, alongside necessary plant maintenance and repairs undertaken during the quarter. Similarly, the Profit After Tax (PAT) margin also saw a slight dip, settling at 23.1% for both periods compared to 25.0% in Q2 FY25 and 26.1% in H1 FY25. Despite these pressures, the company's cash flow from operations remained healthy, with a reconciled figure of INR 20.52 crore for H1 FY26.

Financial Highlights: Q2 & H1 FY26 Performance

Strategic Initiatives and Future Outlook

Jyoti Resins is actively pursuing several strategic initiatives to drive future growth and solidify its market position. A key focus is the brownfield capacity expansion, which will increase the plant's capacity by 1,500 tons per month over the next six months, taking the total to 3,500 tons per month. This INR 5-7 crore capital expenditure is expected to enhance production capabilities, achieve operating leverage, and boost competitiveness. Concurrently, the company is scouting for land for a greenfield expansion, signaling its long-term growth ambitions.

Brand building remains a cornerstone of their strategy. The company continues its extensive advertising, marketing, and branding campaign with national brand ambassador Mr. Pankaj Tripathi. This 360-degree campaign, launched in Q1 FY26, spans TV, print, out-of-home (OOH), and digital platforms like Instagram and Facebook. The objective is to strengthen brand recall, expand reach across markets, and provide the necessary impetus for pan-India growth. Management has committed to investing 7-8% of revenue in brand communications and trade marketing annually.

Market Penetration and Distribution Expansion

Currently, Jyoti Resins has a presence in 14 states in India, with a network of 54 branches and 65 distributors serving 13,000 retailers and 3.5 lakh carpenters. The company's aim is to widen its offerings and increase penetration in both existing and new states. They are particularly focused on Uttar Pradesh and Delhi, where they have already onboarded over 650 dealers, with more than 50% providing repeat orders. The company plans to add five to six more states, including Tamil Nadu, Kerala, Odisha, and Bihar, within the next year, with a vision to be present in every state of India within the next three years.

In terms of product portfolio, the company remains focused on the white glue segment, offering a comprehensive range for furniture gluing applications, including products for OEMs, modular furniture, PVC, MDF, veneer, and laminate. They aim to capture a larger share of the INR 7,000 crore market in this segment before considering diversification into other product categories.

Management's Confident Path Forward

Jyoti Resins & Adhesives Ltd. is on a clear path to achieve a revenue threshold of INR 500 crore within the next three years, driven by a targeted 20% volume growth annually. The company emphasizes maintaining strong financial health, aiming for +30-40% ROE and +40% ROCE, while remaining debt-free and generating positive operating and free cash flows. The management's proactive approach to capacity expansion, aggressive brand building, and strategic market penetration underscores its confidence in sustained growth and its commitment to delivering consistent results for stakeholders. The addition of senior talent like a Chief Operating Officer further strengthens the organizational structure for future expansion.