Target: ₹774
CMP:₹629.70
JG Chemicals Ltd (JGCL) is India’s largest manufacturer of zinc oxide, operating with an installed production capacity of over 60,000 tpa (tons per annum) for zinc chemicals and 10,000 tpa for zinc sulphate. Plants are located in Jangalpur and Belur in West Bengal and Naidupeta in Andhra Pradesh. It is into manufacturing of Zinc Oxide (ZnO), Zinc Sulphate (Heptahydrate and Monohydrate), and recycled zinc products and is counted amongst the top 5 Zinc Oxide producers globally.
JGCL is India’s largest zinc oxide manufacturer and amongst the top-10 global producer, supplying critical chemical grades to industries like tyres, rubber, pharmaceuticals, and ceramics with about 30 per cent market share in India’s zinc oxide market. JGCL has long-standing supply relationships with 9 out of the top 10 global tyre manufacturers and all of the top 11 Indian tyre makers (including Apollo, MRF, and CEAT).
The ₹100-crore Greenfield Plant in Dahej, Gujarat, facility adds 40,000 tpa of capacity for zinc chemicals, scaling the company’s total aggregate capacity from roughly 70,000 MTPA closer to 110,000 tpa. Post completion of the two phases, ₹1,000 crore is expected to be added to the topline.
Strong balance sheet position, coupled with its ongoing expansion at Dahej is expected to further consolidate its position domestically and internationally.
We would recommend a Buy with a target price of ₹774 in the next 9-12 months.