J.G. Chemicals reported strong Q2 FY27 growth with revenue rising 64% to Rs 361.01 crore and profit climbing 86% to Rs 27.95 crore. The surge is driven by strong demand from tire and non-rubber segments. While the company faces high working capital requirements and minor project delays, the expansion to 115,000 MTPA capacity remains on track to support long-term margin goals.
J.G. Chemicals Q2 FY27 Profit Jumps 86% to Rs 27.95 Crore
Revenue grew 64% YoY to Rs 361.01 crore, while EBITDA surged 77% to Rs 38.65 crore.
Reader Takeaway: Robust demand and capacity expansion drive growth, though investors should monitor working capital intensity and project timelines.
What just happened
J.G. Chemicals released its Q2 and H1 FY27 results, showing strong financial momentum. The company achieved a record quarterly profit of Rs 27.95 crore, reflecting an 86% jump over the same period last year. Revenue growth was led by the core tire industry and a strategic push into non-rubber applications like pharmaceuticals and ceramics.
Why this matters
The company is scaling up rapidly to maintain its leadership in zinc oxide production. By diversifying into higher-margin non-rubber products, which now account for 18% of revenue, management aims to lift EBITDA margins from current levels to 14%-15% over the next three years. The establishment of a new subsidiary in Dubai is intended to streamline raw material sourcing and bolster global reach.
Expansion and Strategy
Capacity remains the primary growth lever. The company is currently operating at over 80% utilization. The greenfield project in Dahej, Gujarat, is nearing completion with trial runs set for December 2026. Meanwhile, the brownfield expansion in Naidupeta is now expected to be commissioned by mid-January 2027, slightly later than initially planned. Once these are live, total capacity is projected to exceed 115,000 MTPA.
Risks to watch
Working capital intensity remains high at 90-100 days, resulting in negative cash flow from operations during H1 due to elevated inventory and receivables. Additionally, the spillover of the Naidupeta facility commissioning into Q4 indicates potential operational sensitivity to execution timelines.
What to track next
Watch for the successful commissioning of the Dahej plant in December and the scaling of the zinc sulfate specialized grades. The shift in product mix toward higher-value segments will be the key driver for achieving the target 14%-15% EBITDA margin.