Jyothy Labs Ltd. share price target

Jyothy Laboratories Ltd (JLL) is an Indian FMCG player with products across Fabric care, Dishwashing, Mosquito repellents & Personal Care. JLL reported a stipulating earnings growth of 57%YoY supported by 18% growth in revenue and 240bps improvement in EBITDA margin. Revenue growth was driven by strong growth in volumes at 18.5%YoY. All categories witnessed strong growth, Fabric Care (13%), Dishwashing (28%), Household insecticides (28%) and personal care (28%). Demand outlook is very positive given good monsoon, strong...

ICICI Securities Ltd | Retail Equity Research Jyothy Labs (JLL) witnessed revenue growth of 17.8% to | 405.3 crore on the back of 18.5% volume growth, supported by broadbased growth across categories (on a low base of Q1FY18 impacted by de-stocking across trade channels) Power brands Ujala, Exo, Maxo, Henko, Margo, Pril saw strong growth of 12.2%, 29.6%, 28%, 10.9%, 29.5%, 23.2%, respectively Operating margins increased 236 bps to 15.1% mainly on the back of a decline in other expenses and marketing expenses as a...

ICICI Securities Ltd | Retail Equity Research Jyothy Laboratories (JLL) made an announcement of bonus shares on May 16, 2018. The ratio was one bonus share for every existing equity share i.e. 1:1. The record date for the same is June 30, 2018 while the ex-date for the same is today i.e. June 28, 2018. Consequently, Jyothy Laboratories' share price, as per yesterday's closing price, has adjusted to | 222/share from | 444/share. Hence, now our target price also stands revised to...

Positive momentum continued on the back of Double Digit Growth in Volumes: Jyothy Laboratories Ltd (JLL) has reported healthy set of volume numbers i.e. 11.4% growth in Q4FY18 and we expect that the management will be able to continue the momentum in volumes. Revenue from operations of the company improved to Rs. 5168 Mn in Q4FY18 from Rs. 4661 Mn in Q4FY17 registering 10.9% growth YoY

Reported standalone revenues stood at `505.4 crs in Q4FY18 and at `1699crs for FY18, registering a growth of 16.7% & 4.1% respectively. EBIDTA grew by 44.4% Y-O-Y to `90.6 crs in the quarter. EBIDTA margins stood at 17.9% vs.14.5% in the same period last year. EBIDTA for FY18 stood at `277.5 crs...

Operating margin improved 344 bps to 17.9% mainly on the back of 720 bps surge in gross margins. A&P; spend increase of 90% to | 53.1 crore is part of the company's strategy to increase advertisements in power brands specifically in Henko & Margo JLL had adjusted tax losses of | 65.6 crore in Q4FY17 on account of approval of merger of Jyothy Consumer Products Marketing with JLL. This led to tax reversal. Hence, reported PAT was lower 45.1% YoY to | 60.4 crore. JLL reported other income of | 22.1...

Net sales rose 15.8% YoY to INR5.16b (est. of INR5.11b) in 4QFY18.EBITDA grew 45.8% YoY to INR884m (est. of INR791m). Adj. PAT after non-controlling interest fell 55.2% YoY to INR487m (est. of INR543m). Fabric care, Dish washing and Personal care grew 13.6%, 21.3% and 54.0%, respectively, while Household insecticides fell 10% YoY on a like-to-like basis adjusted for GST.

This product fits well into JYL's niche and innovative product portfolio. It was launched initially in Kerala, with the potential to reach a customer base of over 30m people. JYL initially targets to make Ujala Crisp and Shine an INR1b sales product in south India, and then take the brand to other states - but one state at a time. It targets a turnover of INR2.5b from this brand over 4-5 years. After regaining the lost market share in the household insecticides business, Maxo is expected to do better in the coming years, led by government initiatives (such as Swachh Bharat) and lower competitive intensity. Mortein (Reckitt) has not been doing well in the market, as is the case globally. All out (SC Johnson) has also lost focus on liquids. Both these brands are losing share to Good Knight (GCPL) and Maxo (JYL). GoodKnight is very strong in south India and Maxo in east India.

Double Digit Growth in Volumes on the Back of Personal Care, Dishwashing and Fabric Care Segments: Jyothy Laboratories Ltd (JLL) has reported healthy set of volume numbers i.e. 11.5% in Q3FY18 and we expect that the management will be able to maintain 8-10% volume growth going forward. Revenue from Operations of the company improved to Rs. 4312 Mn during the quarter from Rs. 3983 Mn during Q3FY17 registering 8.3% growth YoY.

Q3FY18 in line: Consolidated net sales, EBITDA, and adj. PAT grew 16% (adjusted for GST accounting), 37% and 61% (vs. consensus estimates of 15%, 32% and 100%). Volume grew 11.5% aided by weak base and gradual recovery in supply chain.