Jubilant Ingrevia Ltd

"Ulle will remain steadfast in our commitment to long-term growth and value creation. Our primary focus will be on customer-centricity, which involves deepening our engagement with clients, understanding their evolving needs, and delivering innovative solutions that exceed their expectations."

We a re pleased to present our Annual Report for FY2024, especially after having leapfrogged ahead of all the odds and challenges we were confronted with lastyear.

Multiple shocks hit the world: climate emergency, geopolitical disequilibrium, supply chain and energy volatility, or persistent inflation. What makes the situation a permacrisis is that we have never had a time wherein all these events happened simultaneously and without a clear solution in sight. Elevated inflation and subdued consumer confidence dulled the prospects of our end-user sector.

The agrochemicals sector was the worst hit, owing to overstocking in the distribution channel and oversupply by China. The nutrition sector also experienced pricing pressure owing to an excess supply from China. Moreover, higher freight costs, exacerbated by the Red Sea crisis towards the end of the fiscal, added another layer of difficulty for global trade and logistics and impacted our business volumes and margins.

Recognising the impact of these factors on our growth and profitability, we swiftly strategised and shifted gears to cushion their effects. Our well-time strategic initiatives, our teams'disciplined efforts, and unwavering dedication allowed us to steer the organisation through these headwinds deftly, minimising the tarnish on our numbers.

Our performance

In FY 2024, global stress cast an ominous shadow on our business space, resulting in a sectoral dip, with our peers reporting a 20-25% slide in their respective businesses. We, too, were faced with the same challenge.

Our revenue from operations stood at Rs.41,358 million. Our EBITDA is at Rs.4,564 million. Our Net Profit for the year was Rs.1,829 million. In sync, our profitability margins also dropped. EBITDA margin dropped to 11% in FY 2024. Notwithstanding, we declared a dividend of 500% for the fiscal - a reflection of our commitment to deliver value to our valued shareholders.

Like every storm is short-lived, we are convinced that this period of volatility shall pass and open up a significantly brighter horizon brimming with profitable growth opportunities. Our optimism rests on the healthy uptick in sales volumes in the fourth quarter. It appears to herald the green shoots of recovery.

Speciality Chemicals

Our Speciality Chemical segment continues to be a cornerstone of our business, contributing to 38% of our overall operations.The revenue from speciality chemicals stood at Rs.15,855 million. This was 12% less than last year.

The revenue loss was cushioned by a trend reversal in Q4 as revenue for the quarter improved by 30% over the preceding quarter. The impressive growth was driven by higher volumes across our pyridine-based products, Di-ketene derivatives, and CDMO portfolio. The CDMO segment also supported the uptick as outsourcing opportunities resurfaced with the improved economic health of established economies.

Nutrition and Health Segment

Revenue from the segment stood at Rs.6,800 million, a 23% increase over the previous year. EBITDA stood at Rs.617 million, clocking a 35% rise YoY. In FY 2024, we introduced several new products, which received considerable traction.

Our volumes of Niacinamide increased, driven by strong market demand. This volume growth has enabled us to improve our global market share in feed-grade Niacinamide compared to FY 2023. We focused on niche segments such as cosmetics and food-grade markets, which helped improve sales volume. In addition, we expanded our product range with value-added products, namely food-grade Choline Chloride and Choline

Bitartrate. These additions have diversified our portfolio, opening up new revenue streams.

Chemical Intermediates

The year was particularly muted as prices remained soft, primarily those of Acetic Anhydride. Revenue at Rs.18,703 million was lower by 23% than the previous year. EBITDA also dropped considerably. Despite the murky financial performance, we improved our market share for Acetic Anhydride and other value-added products such as Propionic Anhydride in Europe. We maintained our domestic market share for Acetic Anhydride, reinforcing our leadership position.

A key highlight for this segment has been implementing world-class digital and analytics initiatives across our global manufacturing facilities. These initiatives have played a crucial role in strengthening our cost structure, ensuring we remain competitive despite market challenges.

Capital Expenditure

Jubilant Ingrevia's pursuit of growth has always been driven by a strategic focus on differentiation and relentless execution to deliver at scale and with quality.

FY 2024 was a hallmark in execution as your Company commissioned six massive projects at its Bharuch and Gajraulla manufacturing sites to strengthen its presence in the Speciality Chemicals and Nutrition & Health verticals.

These units are dedicated to manufacturing high-value products, which will shift the business compass in favour of value-addition, driving overall profitability a few notches higher.

Cost and Efficiency Initiatives

During the year, we initiated important organisationwide projects that helped make the business stronger and more efficient. These initiatives will also enable us with costs savings up to Rs. 1,200-1,400 million on an annualised basis.

Lean: As the name suggests, this project optimises manufacturing costs. With the help of our Project Lean initiatives, we successfully kept our cost under control. We brought our working capital down to 18% of Sales through focused inventory optimisation and other measures.

Surge: On the digital front, we started a new initiative called 'Project Surge' to enable the transformation

of business processes across manufacturing, supply chain, and sales through digital interventions. This initiative has started yielding early-stage results through innovative solutions like 'Digital Twin of Plants. Further, we have completed multiple projects to bring efficiency across our manufacturing locations.

Business Excellence: Under this programme, we have undertaken cost optimisation initiatives and manufacturing efficiency improvement plans at our manufacturing plants.

Energy Efficiency: Under this initiative we aim to reduce our energy costs by decreasing our dependency on fossil fuels and simultaneously increase the overall share of renewable energy.

Project Insight: We have also implemented data analytics and visualisation 'Project Insight' in our business processes to help make more efficient, data-backed, and swift decisions.

Sustainability Drive

Sustainability remains at the core of our operations. As global players, especially in Europe and the United States, intensify their efforts to reduce their Scope 3 emissions, we at Jubilant Ingrevia are committed to aligning with these objectives and advancing our sustainability initiatives.

With renewed vigour, we have strategised to aggressively invest in sustainability to cement our bond with global companies. During the year, we signed an agreement with M/s 02 Renewables for captive Renewable Energy sourcing for our Gajraula and Savli facilities. We expect the share of renewables to increase to 30%+ in the next 12-15 months. Going forward, we envision increasing our share of renewable power to 4x by FY 2028.

Additionally, we have received a +99% Biogenic Content Rating for tests conducted for Carbon C-14 natural content for Green Acetic Acid. This rating underscores our commitment to sustainability and our efforts to provide environmentally friendly products.

In closing

As we move forward in our aspirations positively, we extend our heartfelt gratitude to our entire team, for their passion and commitment have propelled us forward and will continue to be the cornerstone of our future success.

To our shareholders, thank you for your continued faith and confidence in our vision. Your support is the bedrock of our endeavours, and we assure you of progressive growth in shareholder value year after year.

As we embark on this journey towards a brighter future, we are confident that with our collective efforts, Jubilant Ingrevia will continue to set new benchmarks and achieve greater heights.Together, we will navigate the challenges, seize the opportunities, and build a prosperous future for all.