Jyoti Resins and Adhesives Limited Q3 FY26 Earnings Call Summary

Summary

Jyoti Resins and Adhesives Limited - Q3 FY26 Earnings Call Summary Tuesday, February 10, 2026 11:30 AM IST

Event Participants

Executives Meghal Shah (Finance), Samit Shah (Chief Operating Officer), Utkarsh J. Patel (Managing Director)

Analysts Aachal Pal, Aditi Loharuka, Amit Agicha, Ayush Sharma, Chitaksh Gupta, Diya Jain, Faisal Hawa, Harish Shah, Keshav Garg, Kevin Gala, Kishan Gupta, Mudit Minocha, Smith Gala, Vatsal Shah, Vishal Pandya

Financials & KPIs

Geographic & Segment Commentary

• Mature Markets (Gujarat, Rajasthan, Maharashtra, etc.): Management defines “mature” as states with >20% market share. Gujarat remains a stronghold with ~35% market share, acting as the primary cash generator for the business.
• Expansion Markets (UP, Delhi-NCR, etc.): Currently present in 14 states with 9 in the “build-up” stage. UP and Delhi were entered ~12 months ago; UP currently has over 1,000 retail outlets with increasing repeat order rates.
• Product Focus (White Glue): The company remains strictly focused on the white glue (wood adhesive) segment. Management avoids diversifying into epoxies or construction chemicals to maintain specialized unit economics and brand clarity.

Company-Specific & Strategic Commentary

• Capacity Expansion: Brownfield expansion is 70-80% complete, aiming for 3,500 tons/month capacity to support a ₹600-700 crore revenue potential. A new ₹40-45 crore greenfield plant is planned for FY27.
• Professionalization: The company is actively onboarding professionals from multinationals to lead North, East, and South zones, moving away from promoter-led distribution to a delegated professional structure.
• Brand Strategy: Transitioning to a consumer-facing brand with Pankaj Tripathi as brand ambassador. Strategy involves balancing “Trade Push” (8-13% margins for dealers/carpenters) with “Brand Pull” (ATL/BTL spending) to reduce long-term commission reliance.
• Governance & Buyback: Management acknowledged investor concerns regarding the lack of a “Big 4” auditor and stagnant stock price. They committed to discussing a potential share buyback and auditor upgrades at the Board level.

Guidance & Outlook

Risks & Constraints

Q&A Highlights

Growth & Guidance

• Question: Why has revenue been flat since FY24 despite heavy ad-spend? (Keshav Garg)
• Answer: Every 2-3 years we consolidate fundamentals before the next growth leg. October was exceptionally soft across the building material industry, but December exit rates were strong. (Utkarsh Patel)

Capital Allocation

• Question: With ₹170cr cash and a low valuation, why not do a buyback to restore confidence? (Keshav Garg)
• Answer: We initially planned to deploy funds for expansion, but we will take the buyback proposal to the Board for positive consideration. (Utkarsh Patel)

Margins & Competition

• Question: Peers like Pidilite and Astral reported double-digit growth; why did Jyoti miss? (Aachal Pal)
• Answer: Peers have diversified portfolios (epoxies, chemicals); we are pure-play white glue. We grew volumes 20% in Q2, showing our strategy works, despite the Q3 blip. (Utkarsh Patel)

Professionalization

• Question: Are you hiring professionals to manage distribution vs. the owners? (Amit Agicha)
• Answer: We are on a hiring spree at leadership levels, bringing in talent from multinationals to handle new zones and implement professional SOPs. (Samit Shah)

Key Takeaway

Jyoti Resins reported a subdued Q3 FY26 with flattish YoY revenue and volume growth, primarily attributed to a significant demand slump in October. Despite the quarterly softness, the company maintained healthy EBITDA margins of ~25% and a strong net cash position of approximately ₹170-180 crores. Strategic focus remains on the “Euro 2.0” transformation, involving the expansion of capacity to 3,500 tons/month and scaling presence in 9 “build-up” states like UP and Delhi. Management is pivoting toward a professionalized distribution model and increasing ad-spend to 7-8% of revenue to create a sustainable brand pull. While investors expressed concerns over stagnant growth and governance (auditor choice), management signaled a willingness to evaluate capital return via buybacks. The company remains committed to its ₹500 crore revenue milestone, supported by upcoming brownfield capacity and deeper penetration into Northern and Eastern markets.