JG Chemicals Q2 profit rises 86.7% as revenue hits Rs 361 crore

JG Chemicals Limited reported Q2 FY27 revenue from operations of Rs 361 crore, up 63.9% year on year, while profit after tax rose 86.7% to Rs 28 crore, its highest quarterly level. Earnings before interest, tax, depreciation and amortisation margin increased by 78 basis points to 10.72% from 9.94% a year earlier.

What drove JG Chemicals' Q2 FY27 earnings growth?

JG Chemicals said demand across end-user applications, an improved product mix and execution supported its record Q2 FY27 result. Revenue from operations increased 14.3% sequentially from Rs 315.7 crore in Q1 FY27 to Rs 361 crore, representing the fifth consecutive quarter of sequential revenue growth cited by the company.

Earnings before interest, tax, depreciation and amortisation, or EBITDA, rose 76.7% year on year to Rs 38.7 crore in Q2 FY27, while profit before tax increased 82.8% to Rs 37.3 crore. The presentation states that EBITDA includes other income, which fell to Rs 60 lakh from Rs 3.9 crore in Q2 FY26; operating earnings therefore rose despite a lower contribution from other income.

The company linked demand conditions partly to automotive activity during the festive period. Citing Automotive Tyre Manufacturers' Association and Society of Indian Automobile Manufacturers estimates, JG Chemicals said Q2 FY27 passenger-vehicle volumes grew 30.7% year on year, commercial-vehicle volumes rose 28.7%, three-wheelers increased 23.6% and two-wheelers gained 15.2%.

How did JG Chemicals' margins and quarterly profit change?

JG Chemicals' Q2 FY27 EBITDA margin increased 78 basis points year on year to 10.72%, and its profit after tax margin increased 95 basis points to 7.76%. The detailed financial table shows that both margins eased from Q1 FY27, when EBITDA margin was 11.50% and profit after tax margin was 8.27%, even as absolute EBITDA and profit reached new quarterly highs.

The year-on-year margin expansion occurred despite higher energy prices and freight costs, according to JG Chemicals. Management said its pricing model allows zinc-price movements to be passed through, mitigating raw-material price risk, while the company reported finance costs of Rs 10 lakh in Q2 FY27, compared with Rs 20 lakh a year earlier.

Tax expense rose 72.2% year on year to Rs 9.3 crore, below the 82.8% rise in profit before tax, contributing to the 86.7% increase in reported profit after tax. Total comprehensive income was Rs 32.6 crore, up 117.3% from Rs 15 crore in Q2 FY26, including Rs 4.6 crore of other comprehensive income.

What does JG Chemicals' first-half FY27 performance show?

JG Chemicals reported H1 FY27 revenue from operations of Rs 676.7 crore, up 54.4% year on year, and profit after tax of Rs 54.1 crore, up 72.3%. EBITDA increased 66.1% to Rs 74.9 crore, lifting the first-half EBITDA margin by 78 basis points to 11.07% and the profit after tax margin by 83 basis points to 7.99%.

The first-half outcome compares with revenue of Rs 438.3 crore, EBITDA of Rs 45.1 crore and profit after tax of Rs 31.4 crore in H1 FY26. Diluted earnings per share increased to Rs 13.21 from Rs 7.70, while total income rose 52.6% to Rs 680 crore and total expenses increased 51.1% to Rs 605.1 crore.

The H1 FY27 EBITDA margin of 11.07% also exceeded the 10.05% reported for FY26 and the 7.94% reported for FY24. H1 FY27 profit after tax of Rs 54.1 crore was equivalent to about 79% of FY26's reported Rs 68.6 crore, although the presentation provides no full-year FY27 earnings target.

Balance-sheet figures show equity of Rs 597.8 crore at H1 FY27, up from Rs 541.1 crore at FY26, while total liabilities rose to Rs 50.1 crore from Rs 28.2 crore. Current borrowings were Rs 13.8 crore at H1 FY27 versus Rs 6.4 crore at FY26, and capital work in progress increased to Rs 11.9 crore from Rs 7.8 crore as expansion projects progressed.

What capacity additions and products are planned after Q2 FY27?

JG Chemicals expects Phase 1 of its Dahej greenfield project, comprising about 15,000 metric tonnes per annum, or MTPA, of zinc oxide capacity, to begin trial runs in the month following the presentation. Its Naidupeta brownfield expansion is on track for commissioning in Q4 FY27, and the two projects are expected to raise total zinc oxide capacity to 79,904 MTPA.

The Dahej Phase 1 capacity forms part of a planned facility of more than 40,000 MTPA. JG Chemicals said the additions should support anticipated demand through FY28 and FY29, with a Phase 2 Dahej expansion planned subsequently; these are management plans and expected timings rather than reported production volumes.

Existing zinc oxide capacity utilisation exceeded 80% in Q2 FY27, while non-rubber applications accounted for more than 18% of sales. The company is expanding in ceramics, specialty chemicals, agriculture and pharmaceuticals, and said ceramics approvals typically take one to three months, shorter than in some other applications.

During H1 FY27, JG Chemicals launched LabPure analytical-grade zinc oxide on e-commerce platforms and JG-ZRA for non-tyre rubber applications. It also reported successful pilot trials of JG TUR with key tyre customers, a 90-plus specialised-grade portfolio, and the inauguration of an Naidupeta research and development centre during H1 FY27.

Conclusion

JG Chemicals' Q2 FY27 results show faster growth in profit than revenue, with profit after tax rising 86.7% against a 63.9% increase in revenue and year-on-year improvement in both reported margins. First-half revenue of Rs 676.7 crore and EBITDA of Rs 74.9 crore also placed the company above its FY26 margin levels, while non-rubber applications contributed more than 18% of Q2 sales.

The next disclosed milestones are Dahej Phase 1 trial runs in the month after the presentation and Naidupeta expansion commissioning in Q4 FY27. Investors will also have to track whether utilisation above 80%, the planned rise to 79,904 MTPA of zinc oxide capacity, and the rollout of newer products translate into the margin improvement management expects as capacity ramps up.