Jyoti Resins and · risk themes across the available quarters.
Bear-case history
A long-standing investor explicitly stated that the market does not believe the company's numbers, with the stock trading near triple digits. Multiple investors questioned auditor credibility and demanded share buybacks as trust-building measures.
Revenue and EBITDA appear essentially flat since FY24 despite increased advertising and marketing spends. Q3 growth guidance of 20% has not been achieved for four consecutive quarters.
EBITDA margins declined ~700 basis points over three years from 32-34% to ~25%, yet the company continues heavy marketing investments (targeting 7-8% of revenue) with uncertain ROI, and faces competition from larger players with deeper pockets.
COO stated new markets require 2-3 quarters to complete onboarding and another 3-4 quarters for meaningful market share in Delhi NCR. With 9 of 14 current markets still in buildup stage, the payback period is extended.
VAM prices have risen ~100% due to geopolitical tensions; company has taken 60-70% price hike but Q1 margins will be impacted.
Receivable days have risen to ~150-160 days from 120 days due to new state expansions; management expects normalization in 2-3 quarters.
Analyst raised concern that 60-70% price hike could lead to demand destruction; management believes impact is limited as adhesive is 5-10% of furniture cost.
Analyst noted new capacity by competitors in Gujarat; management acknowledged awareness but declined to comment on specific competitors.