JOCIL - Jocil

📊 NSE: JOCIL 🏢 Chemicals 📅 Last Updated: 12/14/2025 8:41

💰 Financial Performance

Revenue Growth by Segment

Total operating income grew 15% YoY to INR 870.09 Cr in FY25. However, high-margin soap products saw a 10% decline in contribution during FY24, while fatty acid sales volumes also decreased, impacting core profitability.

Geographic Revenue Split

The company operates primarily from its manufacturing facility in Andhra Pradesh and maintains four Wind Energy Generators in Tamil Nadu. Specific regional revenue percentages are not disclosed.

Profitability Margins

Profit margins have been on a declining trend for four years. FY25 PBILDT margin stood at 0.66% (down from previous years) and PAT margin was 0.12% (down from 0.23% in FY24). Recovery was noted in Q1FY26 with PAT margin improving to 0.82%.

EBITDA Margin

EBITDA (PBILDT) margin was 0.66% in FY25, representing an operating profit of INR 5.75 Cr. This was significantly lower than the projected INR 10.70 Cr due to the inability to pass on input costs and delayed electricity arrears.

Capital Expenditure

The company completed an expansion of 18,000 MTs in its existing capacity during FY25. This capex was entirely funded through internal accruals without additional debt.

Credit Rating & Borrowing

Credit ratings were downgraded in June 2025 to CARE BBB+; Stable (Long-term) and CARE A2 (Short-term) from CARE A-; Stable / CARE A2+. Borrowing costs are low as the company has nil long-term debt and utilizes only ~0.58% of its working capital limits.

⚙️ Operational Drivers

Raw Materials

Crude vegetable oils (non-edible) and fossil crude oil are the primary raw materials. These are highly volatile and directly impact the cost of fatty acids and stearic acid production.

Import Sources

Raw materials are primarily sourced or influenced by exports from Malaysia and Indonesia, where periodic export duties on crude vegetable oils affect global pricing.

Capacity Expansion

Current capacity was recently expanded by 18,000 MTs to meet anticipated demand from the FMCG sector. The total installed capacity after expansion is not explicitly stated in MTPA.

Raw Material Costs

Raw material costs are a significant portion of the cost structure; the company's inability to pass through price increases to large customers resulted in the PBILDT margin dropping to 0.66% in FY25.

Manufacturing Efficiency

Operating cycle improved to 48 days in FY25 from 59 days in FY24, driven by faster collections. Inventory days remained stable at 47 days.

📈 Strategic Growth

Expected Growth Rate

15%

Growth Strategy

Growth is targeted through the 18,000 MT capacity expansion aimed at the FMCG sector. The company is also renegotiating conversion charges with key customers to improve margins to a target of over 5% on a sustained basis.

Products & Services

Fatty acids, stearic acid flakes, refined glycerin, soap noodles, toilet soap, industrial oxygen, and wind energy.

Brand Portfolio

Jocil (Corporate brand). The company primarily manufactures for institutional buyers and major FMCG players.

Market Expansion

Focusing on increasing volume orders from the FMCG segment following the recent 18,000 MT capacity addition.

Strategic Alliances

Jocil is a subsidiary of The Andhra Sugars Limited (TASL), which holds a 55.02% stake and provides management and financial support.

🌍 External Factors

Industry Trends

The FMCG sector is seeing increased demand, prompting capacity expansions. However, the fatty acid industry remains fragmented and highly competitive, keeping operating margins low (currently below 1%).

Competitive Landscape

The industry is fragmented with intense competition, which exerts constant pressure on the selling prices of fatty acids.

Competitive Moat

Moat is based on 40+ years of experience and long-standing relationships with blue-chip clients like HUL and ITC. Sustainability is challenged by low pricing power and raw material volatility.

Macro Economic Sensitivity

Highly sensitive to global vegetable oil prices and Southeast Asian trade policies. Profitability is also linked to the purchase price of renewable energy fixed by the government.

Consumer Behavior

Increasing demand for personal care and toiletry products in the FMCG segment is driving the company's volume-based growth strategy.

Geopolitical Risks

Export duties imposed by Malaysian and Indonesian governments on crude oil to encourage domestic value addition create supply and price risks for Jocil.

⚖️ Regulatory & Governance

Industry Regulations

Operations are subject to pollution control board norms and international trade regulations regarding the import of non-edible oils.

Environmental Compliance

Compliant with Hazardous Wastes Rules 2008 and PCB regulations regarding water, waste disposal, and air emissions.

Legal Contingencies

Pending dispute with APTRANSCO regarding electricity charge arrears amounting to INR 7.50 Cr, which the agency has contested despite an initial order in favor of Jocil.

⚠️ Risk Analysis

Key Uncertainties

Raw material price volatility is the primary risk, potentially impacting margins by over 50% as seen in the FY25 profit deviation. Regulatory changes in Indonesia/Malaysia also pose significant supply risks.