Euro7000 gross margin reaches 70.2% as EBITDA margin eases

Jyoti Resins and Adhesives Ltd (Euro7000) reported a FY26 gross profit margin of 70.2%, up from 39.1% in FY22, while its EBITDA margin declined to 27.0% from 31.5% in FY25. Gross profit reached Rs 220.83 crore in FY26, but EBITDA and profit after tax both fell from their FY25 amounts.

How did Euro7000's gross margin change from FY22 to FY26?

Euro7000's gross profit margin rose by 31.1 percentage points, from 39.1% in FY22 to 70.2% in FY26. The presentation shows an increase in each intervening year: 47.5% in FY23, 66.5% in FY24 and 69.0% in FY25. FY26 therefore extended the five-year gross-margin progression rather than reversing it.

Gross profit increased every year in the reported FY22-FY26 series, rising from Rs 71.20 crore to Rs 220.83 crore. It was Rs 124.09 crore in FY23, Rs 171.07 crore in FY24 and Rs 195.97 crore in FY25. The presentation reports these outcomes but does not provide a bridge explaining the roles of input costs, pricing, product mix or other factors in the margin expansion.

Did Euro7000's sales rise alongside gross profit?

Euro7000's net sales rose from Rs 181.96 crore in FY22 to Rs 314.74 crore in FY26, while gross profit rose by a larger Rs 149.63 crore over the same period. Net sales increased by Rs 132.78 crore across the four years, consistent with the reported increase in gross margin from 39.1% to 70.2%.

Sales did not increase in every year. Net sales climbed to Rs 261.25 crore in FY23, then fell by Rs 3.95 crore to Rs 257.30 crore in FY24, before reaching Rs 284.12 crore in FY25 and Rs 314.74 crore in FY26. In contrast, gross profit rose by Rs 46.98 crore in FY24, when gross margin increased by 19.0 percentage points to 66.5%.

Euro7000 identifies its business as wood adhesives and states that its Santej, Ahmedabad plant has manufacturing capacity of 3,500 tonnes per month, equivalent to 42,000 tonnes per annum. The presentation does not disclose capacity utilisation, volumes sold, product-level sales or segment-level revenue, so those operating measures cannot be linked to the FY22-FY26 sales progression.

Why did Euro7000's EBITDA margin decline in FY26?

Euro7000's presentation does not specify why its EBITDA margin declined to 27.0% in FY26 from 31.5% in FY25, even as gross margin rose to 70.2% from 69.0%. EBITDA, meaning earnings before interest, tax, depreciation and amortisation, fell to Rs 84.95 crore in the FY26 income statement from Rs 89.48 crore in FY25.

FY26 was the second successive year of EBITDA-margin contraction after the 32.6% reported in FY24. The margin had increased from 13.1% in FY22 to 23.2% in FY23 and 32.6% in FY24, then declined by 1.1 percentage points in FY25 and 4.5 percentage points in FY26. Despite the FY26 decline, EBITDA remained above Rs 23.76 crore in FY22 and Rs 60.62 crore in FY23.

The annual income statement reports FY26 expenditure of Rs 229.79 crore, compared with Rs 194.64 crore in FY25, while net sales rose by Rs 30.62 crore. There is also a Rs 1 lakh difference between the two presentation pages: the income statement gives FY26 EBITDA as Rs 84.95 crore and the annual highlights page gives Rs 84.96 crore, while both report a 27.0% EBITDA margin.

How did Euro7000's FY26 net profit compare with FY25?

Euro7000's profit after tax, or PAT, declined to Rs 69.98 crore in FY26 from Rs 73.87 crore in FY25, and PAT margin fell to 22.2% from 26.0%. FY25 PAT margin had already edged down from 26.1% in FY24, meaning FY26 continued the decline in later-stage profitability from the FY24-FY25 period.

Profit before tax declined from Rs 98.79 crore in FY25 to Rs 94.52 crore in FY26. Other income increased to Rs 11.58 crore from Rs 10.97 crore, while depreciation rose to Rs 1.92 crore from Rs 1.59 crore, interest increased to Rs 10 lakh from Rs 7 lakh, and tax was Rs 24.54 crore against Rs 24.91 crore a year earlier.

Earnings per share also moved lower, to Rs 58.32 in FY26 from Rs 61.57 in FY25, although it remained above Rs 55.93 in FY24. FY26 net sales of Rs 314.74 crore were the highest in the five-year income-statement series, but both EBITDA of Rs 84.95 crore and PAT of Rs 69.98 crore were below FY25, showing that the gross-margin advance did not translate into higher operating or net profit in that year.

Conclusion

Euro7000's FY22-FY26 data show a substantial rise in gross profitability, with gross profit margin increasing from 39.1% to 70.2% and gross profit rising from Rs 71.20 crore to Rs 220.83 crore. However, FY26 separated gross-profit performance from later-stage earnings: EBITDA margin fell to 27.0% and PAT margin to 22.2%, compared with 31.5% and 26.0%, respectively, in FY25.

The presentation does not disclose a sales target, margin target or scheduled financial event to explain the next operating outcome. The next disclosures will be relevant for the unresolved gap between the FY26 gross-margin gain and lower EBITDA, while H1FY27 balance-sheet figures show trade receivables of Rs 161.66 crore, inventories of Rs 19.88 crore and capital work-in-progress of Rs 3.94 crore.