Buy Jubilant Ingrevia; target of Rs 900: Anand Rathi

Moneycontrol • 4 days ago

Original source

Key Investment Pillars

  • Acetyls mix shift: Improved pricing in Acetic Anhydride and Ethyl Acetate, driven by higher raw material costs and favorable market conditions, is expected to support EBITDA growth in Chemical Intermediates.
  • Nutrition and Health Solutions (NHS) ramp-up: Human-grade B3 ramp-up and improving mix are expected to drive EBITDA growth in NHS, with management guiding for 1/3rd realization of the confirmed CDMO pool of Rs15bn in FY27.
  • Specialty Chemicals (SC) growth: SC is expected to grow 10% y/y in H1, driven by Fine Chemicals and Agro CDMO dispatches, with management targeting 20-25% EBITDA CAGR across SC and NHS.
  • CDMO execution: Clarity on CDMO execution and volume visibility, particularly for the large Agro contract, is a key monitorable, with management expecting volume clarity in the coming weeks.

Thesis Validation Checklist

  • CDMO volume growth: Monitor CDMO volume growth, particularly from the large Agro contract, to validate the thesis.
  • NHS ramp-up: Track the progress of the human-grade B3 ramp-up and improving mix in NHS to support EBITDA growth.
  • CI pricing: Monitor CI pricing, particularly for Acetic Anhydride and Ethyl Acetate, to ensure it remains favorable.
  • SC growth: Track SC growth, driven by Fine Chemicals and Agro CDMO dispatches, to validate the thesis. Investors should watch for these signals over the next ~12 months to see if the thesis is playing out.