Shares of this small-cap multibagger company are rallying ahead of its board meeting!

The agenda of the board meeting is to discuss matters about the independent directors of the company.

The shares of Jyoti Resins and Adhesive Ltd are buzzing on the bourses today. As of 1.20 pm, the shares of the company are trading higher by 2.7 per cent.  

This rally comes ahead of the company’s board meeting, which is scheduled for Friday, March 24, 2023. The agenda of the board meeting is to discuss matters about the independent directors of the company.  

Jyoti Resins 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.    

The company, whose current market cap stands at Rs 1,21,093.16 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.    

Share Price Performance - The rise of a multibagger stock 

The shares of Jyoti Resins have given stellar returns to investors in the last couple of years. In the last two years alone, the share price of Jyoti Resins has jumped over 600 per cent, going from Rs 158.40 on March 19, 2021, to Rs 1124.60 on March 21, 2023.  

This share price movement is supported by an outstanding business performance by the company. Over the last 8 quarters, on a standalone basis, the adhesive company’s top line has increased by 110 per cent, whereas the bottom line has grown by 300 per cent. Similarly, the EPS has grown from Rs 3.25 in December 2020 quarter to Rs 10.12 in December 2022 quarter. 

On the valuations front, Jyoti Resins is trading at a cheaper valuation when compared to its competitors and is almost debt free. At present, the company is trading at a TTM PE of 36.52x, as against the PE of 93.25x 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 and 57.95 per cent respectively. In contrast, Pidilite delivered an ROE and ROCE of 19.7 per cent & 25.7 per cent, respectively.    

Currently, the shares of Jyoti Resins have been put under additional surveillance for the long term by the Bombay Stock Exchange.