JG Chemicals ends FY26 with record revenue, while margins wait for the April pass-through

JG Chemicals Limited closed FY26 with its highest-ever annual revenue, EBITDA, and profit, backed by a strong Q4 run-rate and steady demand from its core tyre and rubber customers. For Q4 FY26, revenue from operations rose to INR 286.2 crores, up 27.6% year on year. EBITDA came in at INR 26.8 crores and PAT at INR 18.9 crores. For the full year FY26, revenue from operations reached INR 972.9 crores, EBITDA was INR 97.8 crores, and PAT stood at INR 68.6 crores.

The quarter also reflected the trade-offs that come with running a recycling-led, commodity-linked model in an uncertain world. EBITDA margin in Q4 FY26 was 9.36% compared with 10.25% in Q4 FY25. For FY26, EBITDA margin moderated to 10.05% from 11.33% in FY25. Management attributed this pressure largely to March disruptions, including delayed imports, higher domestic procurement costs linked to LME movements, and a sharp rise in energy prices. The company said it has already implemented pass-through of higher freight, energy, and procurement costs to customers effective 1 April 2026, with benefits expected to flow from Q1 FY27.

FY26 performance: growth led by volumes and a strong second half

Management stated the company delivered double-digit volume growth for FY26 despite a softer first half, with a strong pull-back in the second half. The operating environment for tyre-linked chemicals remained supportive, with management citing strong automotive and tyre industry demand and capex plans by tyre majors.

From a customer franchise perspective, JG Chemicals continued to position itself as a scale supplier to the tyre industry. The company highlighted that it serves nine out of the top ten global tyre manufacturers and all major Indian tyre manufacturers, supported by long-standing relationships and a direct-to-customer sales approach. Management also underlined its customization capability, stating it now offers over 90 specialized zinc oxide grades.

Financial snapshot

Revenue mix: tyre still dominant, but non-rubber is gradually rising

The company’s revenue segmentation shows the business remains heavily skewed toward Rubber and Tyre applications. In FY26, Rubber and Tyre contributed 85.0% of revenue, while Pharma and Chemicals contributed 8.2%, Agri 3.7%, and Others 3.1%. In FY24, Rubber and Tyre contribution was higher at 89.7%, indicating gradual diversification, but the mix remains far from the company’s longer-term intent.

Management has consistently linked its diversification ambition to capacity and proximity. The Dahej project is framed as the catalyst to expand meaningfully into ceramics, specialty chemicals, pharmaceuticals, and other western India end markets where logistics from eastern and southern plants is less efficient.

Capacity and capex: Dahej becomes the next growth lever

JG Chemicals operates manufacturing facilities in West Bengal and Andhra Pradesh, with combined zinc chemicals capacity of close to 70,000 MTPA as per management commentary. In the concall, management stated zinc oxide utilization is around 77% and can be increased to 86% to 87% before becoming constrained. Zinc sulphate utilization is about 60%.

The key upcoming project is the Dahej greenfield facility in Gujarat. In the investor presentation, the company disclosed the following for Dahej: land acquired of 11.43 acres, planned capacity of over 40,000 MTPA, capex of INR 100 crores, and funding through internal accruals. It also stated potential revenue of INR 900 crores at scale and indicated commissioning would start in H1 FY27. Management said civil works are in advanced stages and equipment installation has commenced.

In the concall, management also provided ramp-up guidance. For the initial six months of operations in FY27, the company expects Dahej utilization to reach around 35% to 40%. For FY28, it expects utilization to be around 65% to 70%.

Operations and risk context: supply disruption handled, cost reset pushed to April

A key operational theme for Q4 was supply chain disruption in zinc dross, the company’s primary raw material. Management stated imports from the Middle East froze during March and shipments from Europe faced delays, pushing the company to procure more from domestic sources at higher prevailing LME prices. The company also highlighted that its scale, balance sheet strength, and long-standing relationships have made it a preferred buyer for suppliers globally, allowing it to maintain uninterrupted supply to customers.

On pricing, management reiterated a pass-through model where the sales price is linked to LME. It said incremental costs related to raw materials, energy, freight, and other ancillary costs were transparently passed on to customers effective 1 April 2026. Management expects the benefit of this reset to reflect from FY27.

Beyond zinc oxide: zinc sulphate, renewables, and recycled rubber

While zinc oxide remains the dominant product, management discussed the zinc sulphate business as a growing but currently under-utilized segment. It attributed muted demand in FY26 to a continuous increase in zinc sulphate prices, which led farmers to defer purchases. Management said green shoots have emerged in recent months as the market accepts a new pricing band.

The company also highlighted sustainability-led initiatives. Management stated Phase 1 of the solar power generation project at Naidupeta was commissioned in FY26. The CFO mentioned about INR 2 crores of spend and a payback period of around 3 to 3.5 years, positioning it as both a cost-saving and ESG initiative.

One of the more strategic initiatives discussed was a recycled rubber project. Management said pilot trials have received extremely positive customer feedback and that the company is working on a commercial-scale project, along with adjacent products for the same customer segment. However, it did not disclose capex, capacity, timeline, or revenue potential.

What to track from here

The FY26 update builds a clear near-term narrative: demand remains strong, Q4 margins were temporarily pressured by March disruption, and pricing actions from April are expected to normalize profitability. The bigger medium-term question is whether Dahej can shift the company’s mix away from Rubber and Tyre meaningfully, as management intends.

For investors, the most measurable checkpoints from management commentary are the Dahej commissioning starting H1 FY27, the ramp-up trajectory toward 65% to 70% utilization by FY28, and the completion of Naidupeta debottlenecking targeted by December 2026. If these timelines hold, FY27 and FY28 could mark the period when capacity expansion and diversification begin showing up more visibly in reported numbers.