Rs 117 to Rs 2414: Shares of this micro-cap chemical company became 20x in two years!

An investment of Rs 1 lakh in the shares of this company two years ago would have turned to Rs 20.6 lakh today!

Jyoti Resins and Adhesives Ltd, a domestic company engaged in the business of synthetic resin adhesives, has given its investors stellar returns of 1,963 per cent in the last two years! During this period, the company’s share price has steadily increased from Rs 117 on 02 June 2020 to Rs 2414.60 on June 2, 2022.  

The company manufactures various types of wood adhesives (white glue) under the brand name EURO 7000. Launched in the year 2006, the brand EURO 7000 is now the second-largest selling wood adhesive (white glue) brand in India in the retail segment.  

Currently, the company is trading at a TTM PE of 48.87x, as against the PE of 89.9x of Pidilite Industries Ltd, which is the market leader in the organized adhesives industry. In FY22, Jyoti Resins delivered an exceptional ROE and ROCE of 43.21 per cent & 57.95 per cent respectively. In contrast, Pidilite delivered an ROE and ROCE of 19.7 per cent & 25.7 per cent, respectively. 

The company, whose current market cap stands at Rs 974 crore, aims to secure the top position in the wood adhesives field in the retail segment and become the country’s most preferable adhesive brand for carpenters. In alignment with this, the company designed a unique carpenter reward model system which is a loyalty program for carpenters. Currently, 3 lakh carpenters are registered under this program.  

Over the last 8 quarters, the adhesive company’s topline has increased by over 7x, whereas the bottom line has grown over 6x. Similarly, the EPS has grown from Rs 2.80 in June 2020 quarter to Rs 17.30 in March 2022 quarter. 

At 1.41 pm, the shares of Jyoti Resins & Adhesives were trading at Rs 2430 apiece, an increase of 0.64 per cent from the previous closing price of Rs 2414.60 on BSE.