Jubilant Agri & Consumer Products - Emerging Adhesives Challenger - Initiating Coverage

We Initiate coverage on Jubilant Agri & Consumer Products Ltd (JACPL), a thinly researched company, with a Target price of Rs. 2,950. A part of the well-regarded Jubilant Bhartia Group, JACPL has quietly built one of the fastest-growing adhesive brands in India, leveraging the group’s deep chemical capabilities and disciplined execution. In adhesives, the company has consistently outperformed larger peers, delivering industry-beating growth alongside steady margin expansion. Its upcoming capacity additions and distribution build-out provide strong visibility for sustained growth over the next few years. While the adhesives business is emerging as the company’s core growth engine, its leadership position in Food Polymers and VP Latex provides a stable, high-margin cash-cow foundation. JACPL is also in the process of demerging its highly cyclical agri-business—where profitability has improved recently but remains structurally volatile. The separation is a clear value-unlocking opportunity and should sharpen strategic focus on the high-quality consumer and polymer platforms.

Adhesive business - Strategically Bonding the Next Engine of Growth:

JACPL’s adhesive division (Jivanjor) has emerged as one of the fastest-growing brands in the category, consistently outperforming industry growth and gaining share from established leaders. Backed by strong chemistry capabilities, a rapidly expanding distribution footprint with 1200+ distributors and 27,000+ retailers, and sustained investments in contractors (3lacs+) and influencers, the business is entering a multi-year scale-up phase. New capacity in the West, deeper penetration in Tier-2/3 markets, and a technology-led product portfolio (fast drying, high coverage, eco-friendly) position adhesives as the company’s core long-term growth engine.

Industrial Polymers - High-Margin, Cash-Generating Core:

JACPL’s Food Polymer and Latex businesses form a stable, high-margin backbone, providing predictable cash flows and strong ROCE (65% FY25). With entrenched customer relationships, long approval cycles, and minimal competitive intensity, these segments operate as steady annuity businesses. The recent foray into SBR (Styrene-Butadiene Rubber) Latex adds an optional growth lever, but the core polymer portfolio already offers resilience, visibility, and the financial strength to fund the aggressive expansion of the adhesives franchise.

Demerger to Sharpen Core Business Focus:

JACPL is in the process of demerging its cyclical Agri business—a segment that, despite recent improvement, remains structurally volatile and subsidy-dependent. Separating this division will sharpen strategic focus on the company’s high-quality Adhesives and Industrial Polymer businesses, improve earnings visibility, and unlock value by allowing each entity to be valued on its true fundamentals. The demerger also enhances capital allocation clarity and positions the core consumer–polymer platform for a cleaner, more sustainable growth trajectory.

Valuations, view & risks:

We are factoring 14% revenue CAGR / ~310bps expansion in margins over FY25–FY28E, supported by steady growth, healthy margins in the industrial polymers segment, and scale benefit from the adhesives business. We value JACPL on a SOTP basis to arrive at TP of Rs. 2,950; valued the fast-growing adhesives business on PE basis and at 50% discount to its largest peers, other businesses accordingly. Initiate with a BUY rating. Key risks: Volatile raw material prices, potential butadiene supply disruptions, and a slowdown in the construction sector impacting production and profitability.

Company website: https://www.jacpl.co.in/

Click to download the full Jubilant Agri & Consumer Products IC Report

Analyst: 

• Rahul Dani - Research Analyst, Institutional Equities (NISM-201500034725)
• Aachal Pal - Research Associate, Institutional Equities (NISM-202300215737)

Frequently Asked Questions (FAQs)

Jubilant Agri & Consumer Products is gaining attention as an emerging challenger in the Indian adhesives and specialty polymers space. Here are the key questions investors are asking.

Why is JACPL’s adhesives business important?

The adhesives division is one of the fastest-growing in India, gaining market share through strong chemistry capabilities, rapid distribution expansion, and contractor-led brand adoption.

What role do industrial polymers play?

Food Polymers and Latex businesses generate stable, high-margin cash flows with strong ROCE, supporting funding for aggressive growth in consumer adhesives.

How does the agri-business demerger help investors?

The demerger separates a cyclical, subsidy-linked business, improving earnings visibility and allowing the core consumer–polymer platform to be valued more accurately.

Is this suitable for swing traders?

Yes. Improving business mix, margin expansion visibility, and corporate actions like demerger often act as medium-term re-rating triggers for swing trades.

Further Reading for Long-Term Investors:

• Read our detailed Equity Research reports in coverage universe