CDG Petchem - CDG Petchem

📊 BSE: 534796 🏢 Plastic Products - Industrial 📅 Last Updated: 11/13/2025 15:25

💰 Financial Performance

Revenue Growth by Segment

The company is transitioning from petrochemicals to logistics. Standalone revenue for CDG Petchem fell 41.6% YoY to INR 8.98 Cr in FY25 from INR 15.39 Cr in FY24. However, its new 51% subsidiary, Jujhar Logistic & Travels Ltd, reported revenue of INR 159.88 Cr for 9M FY26, which is a 28% increase over its full-year FY25 revenue of INR 124.87 Cr, indicating rapid scaling in the automotive logistics segment.

Geographic Revenue Split

Not disclosed in available documents, though operations are headquartered in Hyderabad, Telangana, with a logistics network serving major automotive hubs across India.

Profitability Margins

Jujhar Logistic reported a Net Profit Margin of 12.75% for 9M FY26 (INR 20.39 Cr PAT on INR 159.88 Cr revenue), compared to 18.13% in FY25. CDG Petchem standalone reported a Net Profit Margin of -12% in FY25, deteriorating from -6% in FY24 due to lower turnover and fixed costs.

EBITDA Margin

Jujhar Logistic achieved an EBITDA margin of 20.73% (INR 33.14 Cr) in 9M FY26. This represents a compression from the 26.35% margin (INR 32.90 Cr) recorded in FY25, likely due to the 'challenging macro and operating environment' cited by management during the scale-up phase.

Capital Expenditure

CDG Petchem incurred INR 0.35 Cr in capital expenditure during FY25. Post-FY25, the company significantly expanded its capital base, increasing paid-up capital from INR 3.07 Cr to INR 9.23 Cr via a private placement of 61,58,000 shares in June 2025 to fund the acquisition of Jujhar Logistic.

Credit Rating & Borrowing

The Interest Coverage Ratio for FY25 stood at 1.31, an improvement from -0.01 in FY24. Total outside liabilities to shareholders' equity (Debt-Equity) was -1.18 in FY25 compared to 10.72 in FY24, reflecting a significant restructuring of the balance sheet and capital infusion.

⚙️ Operational Drivers

Raw Materials

For the legacy business: Chemicals (Plastics, Polymers), Mats, Mattresses, Insulation Sheets, and Pillows. For the new logistics business: Fuel and vehicle maintenance parts are the primary operational costs, though specific % of total cost is not disclosed.

Import Sources

Chemicals are sourced from leading producers located worldwide through international collaborations, specifically for the Morbido Merchandise subsidiary (prior to its divestment).

Capacity Expansion

The company shifted its main objects in the MOA from the plastic industry to the transportation sector. It expanded its operational capacity by acquiring a 51% stake in Jujhar Logistic & Travels Ltd effective November 18, 2025, moving from a zero-employee standalone entity to a large-scale logistics provider.

Raw Material Costs

Not disclosed in available documents for the logistics segment; legacy chemical trading costs are reflected in the 41.6% drop in standalone turnover.

Manufacturing Efficiency

Not applicable as the company has pivoted to a service-based logistics model. Efficiency is measured by 'damage-free and on-time deliveries' from plant dispatch to dealership gates.

Logistics & Distribution

Distribution is the core business post-acquisition. The company provides automotive logistics for major OEMs. Efficiency is driven by real-time monitoring to reduce transit delays.

📈 Strategic Growth

Expected Growth Rate

28%

Growth Strategy

Growth is being achieved through a total pivot in business strategy: 1) Acquisition of a 51% stake in Jujhar Logistic & Travels Ltd to enter the high-demand automotive logistics sector. 2) Capital infusion via private placement (INR 6.16 Cr increase in paid-up capital). 3) Leveraging a high-profile client base including Maruti and Tata to scale operations. 4) Implementation of GPS and telematics to provide tech-enabled logistics services.

Products & Services

Automotive logistics solutions (transporting vehicles from plants to dealerships), merchant export of chemicals, and distribution of mats, mattresses, and insulation sheets.

Brand Portfolio

Jujhar Logistic & Travels Limited, CDG Petchem, Morbido Merchandise (former subsidiary).

New Products/Services

New service offering: GPS-powered, real-time monitored automotive logistics. Expected to be the primary revenue driver (already contributing INR 159.88 Cr in 9M FY26).

Market Expansion

Expansion into the transportation sector by altering the Memorandum of Association (MOA) to include logistics and vehicle transport.

Strategic Alliances

Acquisition of 51% stake in Jujhar Logistic & Travels Ltd. International collaborations for chemical distribution through Morbido Merchandise (ceased July 2025).

🌍 External Factors

Industry Trends

The Indian plastic industry is expanding in food processing and healthcare, but CDG has strategically exited this to enter the logistics sector. The logistics industry is shifting toward tech-enabled, transparent delivery systems (GPS/Telematics) to meet OEM demands for efficiency.

Competitive Landscape

The company faces competition in the logistics sector based on cost-effectiveness, infrastructure facilities, and the ability to provide real-time tracking.

Competitive Moat

Competitive advantage is built on established relationships with major Indian and global auto OEMs (Maruti, Tata, etc.) and a technology-integrated fleet. This creates high switching costs for OEMs who require reliable, damage-free delivery networks.

Macro Economic Sensitivity

Highly sensitive to the Indian automotive industry's production cycles and fuel price volatility, which impacts the logistics segment's operating costs.

Consumer Behavior

Increased demand for passenger vehicles in India drives the need for expanded automotive logistics capacity.

Geopolitical Risks

Risks include changes in government policy regarding import licenses and subsidies, as well as international trade barriers for the merchant export business.

⚖️ Regulatory & Governance

Industry Regulations

Operations are subject to the Factories Act, Mines Act, and environmental/safety standards for logistics and chemical handling. The company must comply with SEBI (LODR) Regulations for its listed status.

Taxation Policy Impact

The company reported a Deferred Tax Liability of INR 0.33 Cr in FY25, up from INR 0.23 Cr in FY24, due to depreciation differences between the Companies Act and Income Tax Act.

Legal Contingencies

The company received a waiver of fines from the Stock Exchange for various non-compliances under SEBI regulations after paying the directed fine amounts. No other major pending court cases were disclosed.

⚠️ Risk Analysis

Key Uncertainties

The primary uncertainty is the successful integration and consolidation of Jujhar Logistic's results into CDG Petchem, as only results from Nov 18, 2025, onwards are merged. Macroeconomic shifts could impact the 20%+ EBITDA margins currently seen in the logistics subsidiary.