Jyothy Labs Ltd. share price target

Degrowth in Volumes Due to Destocking in Supply Chain; and Household Insecticides in Focus Going Forward:Jyothy Laboratories Ltd (JLL) has reported disappointing set of numbers in Q1FY18 due to destocking across distribution channels before the implementation of GST,Revenue from Operations of the company declined to Rs.3858 Mn during the quarter from Rs.4529 Mn during Q1FY17 registering YoY degrowth of 14.8%.General trade, which is contributing 79.0% of total Trade channel, is declined by 18.0% where wholesale is consisting 35.0% of total General Trade.

Q1FY18 below expectations: Consolidated net sales declined 16%, while EBITDA and adj PAT plummeted 48% and 44% YoY. Volume declined 17% YoY. Management highlighted (i) wholesale destocking in general (35% of general trade), (ii) 51% sales decline in general trade in Kerala

Net sales registered a de-growth of 16% Y-O-Y to `355.9crs in Q1FY18. EBIDTA de-grew by 46% Y-O-Y to `43.6crs in the quarter. EBIDTA margins stood at 12.2% vs.19% in the same period last year. Reported PAT decline by 53% Y-O-Y to `20.6crs in Q1. PAT margins stood at 5.8%...

Jyothy Laboratories reported a disappointing set of numbers, significantly below our estimates. The pressure in the trade channel and heavy de-stocking ahead of GST implementation impacted the performance of the company. General trade, contributing 79% to the total trade channel (35% of GT is wholesale) witnessed 18% QoQ decline. Additionally, CSD had no billing for June Thus, it reported 15.0% YoY decline in net sales (volume decline of 17% YoY) to | 373.8 crore, 8.6% lower than our estimate of | 408.8...

Sluggish Recovery in Volumes Post Demonetisation in Q4FY17 and Household Insecticides Yet to Improve: Jyothy Laboratories Ltd (JLL) has delivered reasonable volume growth of 5.1% in Q4FY17, compared to 13.7% volume growth in Q4FY16. The company hasreported total income from operations at Rs.4661 Mn during this quarter, clocking 3.8% growth YoY compared to Rs.4490 Mn in Q4FY16. The companys EBITDAmargins improved QoQ by 29 bps to reach 13.0% during the quarter compared to 12.7% during Q3FY17 on the back of reduction in employee cost.

Net sales, EBITDA and Adj PAT grew 4%, -4% and 35%. Overall volumes grew 5.1% but ex-HI, the growth was higher at9.7%.Personal wash and fabric care posted decent growth of 23% and 8% (given higher share of south). Dish wash recorded muted sales growth at 4%.

JLL's revenue grew at muted 4%YoY in Q4FY17 impacted by demonetisation and muted price growth. EBITDA margins contracted 90bps YoY due to 190bps YoY reduction in gross margins on muted price growth. We reduce our FY18E revenue forecasts by 5% factoring the demonetisation, while we expect revival in demand will drive revenue to grow at 11% CAGR over FY17-19E. EBITDA margins will face medium term headwinds, but once price...

Backed by volume growth of 5.1%& 6.9% in Q4 and FY17 respectively, the company clocked a 4.1%& 5.5% growth in its Net Sales for the same time periods. Power brands recorded a growth of 2.6% driven by volume growth of 4.1% in Q4. For FY17 power...

Fabric care and dishwashing segment grew 8.9% and 4.2% YoY to | 180.2 crore and | 120.9 crore, respectively. However, household insecticide continued to report a decline in revenue. It declined 6.5% YoY. Personal care segment grew 22.5% YoY on a small base EBITDA remained flat for the quarter at | 62.7 crore (I-direct estimate: | 64 crore). Raw material cost as a percentage of net sales grew 200 bps YoY led by a rise in input cost, thus, operating profit contracted marginally by 53 bps YoY to 13.9% against our estimate of 14.4%...

EBIDTA grew by 2% Y-O-Y to `51.3 crs in the quarter. EBIDTA margins stood at 13.8% vs. 14.2% in the same period last year. EBITDA for the 9 months was `192 crs. showing a growth of 22.4%. Reported PAT grew by 12.5% Y-O-Y to `29.3 crs in Q3. PAT Margins expanded by...