Total Capacity Post-Expansion: Current installed capacity 77,000 MTPA to increase to ~79,900 MTPA after Dahej Phase 1 and Naidupeta expansions. With Phase 2 at Dahej, total capacity would exceed 115,000 tons, making JG Chemicals among top 3 global zinc chemical players.
Land Acquisition: Through material subsidiary BDJ Oxides Private Limited, acquired 16.74 acres of freehold land at Naidupeta, Tirupati District, Andhra Pradesh during 2026 for future expansion flexibility.
Product Development and R&D
Portfolio: Over 90 specialized grades of zinc oxide currently offered.
New R&D Center: Inaugurated at Naidupeta with capabilities in new product and grade development.
Recent Launches:
LabPure (analytical grade zinc oxide) launched on e-commerce platform in H1 FY27.
JDZRA introduced for non-tire rubber applications.
Patent: Applied for patent of rubber curing activator.
JG TUR (Tire Upscaled Rubber): Initiative to convert end-of-life tires into usable rubber material. Pilot trials commissioned with key customers and successful. Focus now on commercialization through product development and customer engagement. Investment capacity and implementation timeline to be shared later.
Market Diversification
Non-Rubber Applications: Account for over 18% of H1 FY27 sales (up from ~10% in FY24). Expanding across ceramics, specialty chemicals, agriculture, pharmaceuticals, cosmetics, and coatings.
Ceramics Market: Shorter approval cycles (1-3 months) enable faster penetration. Targeting 10-15% share of Indian ceramic market.
Zinc Sulphate Business: Installed capacity 10,000 MTPA. Current utilization ~50%. Applications in agriculture (micronutrient) and pharmaceuticals. Focus on expanding market reach in Southern India and developing specialized grades for exports.
Battery Grade Zinc Oxide: Supplying customized grades to select battery manufacturers as part of international zinc battery initiative. Qualification stage completed with some customers; volumes expected in 2-3 years as zinc batteries scale.
Raw Material and Supply Chain
Sourcing Network: Over 100 global suppliers. Long-standing relationships ensured uninterrupted availability despite West Asia crisis and Ukraine-Russia war disruptions.
Pricing Mechanism: LME-linked procurement and selling price with 30-45 days inventory time exposure. Business model agnostic to zinc price movements.
International Presence: Incorporating BDJ Materials and Metals Trading FZCO in Dubai as step-down wholly owned subsidiary to diversify zinc raw material sourcing and support global sales.
Sustainability Initiatives
Business Model: Inherently aligned with circular economy principles using recycled zinc for majority products.
Solar Power: Phase 1 of Naidupeta solar project operational, meeting 25-30% of plant's energy requirements. Evaluating capacity expansion based on new government regulations effective January 1, 2027.
Certifications: ISO 9001, 14001, 45001 certified company.
CSR: Investing across education, healthcare, animal welfare, environment, and rural development.
Renewable Energy Target: Working towards meeting 50% of energy requirements through renewable sources.
Industry and Demand Outlook
Principal Market: Tire and rubber industry maintains strong relationships with leading manufacturers in India and globally.
Automotive Industry Momentum: Q2 FY27 supported by festive demand. Passenger vehicles grew ~30% YoY, 2-wheelers ~15%, commercial vehicles ~29%, 3-wheelers ~23% per SIAM/ATMA estimates.
Tire Industry Capex: Indian tire majors progressing with ~INR 25,000 crores announced capex to meet growing OEM, replacement, and export demand.
Industry Consolidation: Shift from fragmented regional suppliers to organized players capable of consistent quality, customized grades, and reliable large-scale supply. JG Chemicals well-positioned as largest player with ~30% market share.
Growth Target: Internal goal to double revenues every three years. Confident of exceeding INR 1,200 crores in FY27 (vs. INR ~600 crores in FY24).
Management Commentary and Guidance
Current Demand: Strong across all customer end-user applications in Q3 FY27. October 2026 production was highest ever.
Margin Outlook: Expect EBITDA margins to reach 14-15% in three years through increased share of value-added products and operating leverage.
Cash Flow: Expect improvement in coming quarters as business scales. Negative operating cash flow in H1 FY27 attributed to working capital intensity during high-growth phase.
Funding: No additional borrowing expected for expansions. Internal accruals sufficient; expect net cash surplus >INR 100 crores by FY27 end.
