JG Chemicals is India’s largest zinc oxide manufacturer in production and revenue for zinc oxide manufacturing through the French process. The company plans to establish a greenfield manufacturing facility in Gujarat. Moreover, the company is an approved vendor to most large global tyre companies, with a significant presence in Southeast Asia. Presently, the company’s manufacturing process leads to the generation of zinc ash, which it sells in the market. The company plans to utilize the in-house availability of zinc ash in producing zinc sulphate. The company also intends to continue to leverage its direct marketing and distributor network and its industry standing to establish relationships with new export and local customers and expand the customer base. The company also has a record of sustained consolidated revenue from operation, growing at a CAGR of 34.3% during FY21-23. With a leading market position and strong customer base, the company maintains high customer retention rates and explores growth opportunities in Southeast Asia. Despite high entry barriers, its certifications and global supplier base ensure continued growth. As we advance, the favorable demand outlook in automotive, rubber, and ceramics, along with the expected revival of the chemical industry in early FY25, positions JG Chemicals for sustained growth and market leadership. The issue is valued at a P/E of 29.6x on the upper price band based on FY24 earnings, which is fairly valued. We, therefore, recommend an “SUBSCRIBE” rating for the issue.
Comments
Post a Comment