Jyothy Labs Ltd. share price target

The revival of the consumer sentiment has been reflected in the company's performance across brand portfolio. The company has been focusing on volume led sales growth, brand building, product innovation and cost rationalization measures leading to sustainable profitable growth. There is strong demand acceleration in the General Trade and Ecommerce Platform while Modern Trade stores (MT') and Canteen Stores Department (CSD') operations...

Though JLL has been able to witness profitable growth in dish washing & personal care segment over the years, the saturation in fabric care segment & continued losses/low profitability in HI segment remain a concern. The company has not been very aggressive behind new launches & advertisement spends have been fairly low. The stock is trading at 23x & 21x FY22E & FY23E earnings, respectively. We maintain our HOLD recommendation on the stock with a revised target price of | 150/share....

Jyothy Laboratories (JYL) reported better-than-expected numbers in 2QFY21. The outlook also appears good for the next couple of quarters, supported by (a) continued tailwinds in the Dishwashing and Household Insecticides (HI) categories, (b) 40% sales contribution coming from rural (which is likely to fare even better in 2HFY21), and (c) a highly favorable...

Jyothy Labs Ltd. is a fast moving consumer goods (FMCG) company founded by Mr. M P Ramachandran in 1983. Over years, Jyothy has evolved from a single product company into a multi-product company. It is the largest player in the fabric whitener space. The company's business divisions are Fabric Care (41%), Dishwashing (33%), Personal care (11%), Household Insecticide (11%) and Laundry services (2%). JLL's manufacturing units are strategically present across India to maintain a lower logistics cost. It has 26 manufacturing facilities across 22 location and has a distribution...

In the current volatile times, the company witnessed healthy growth largely due to favourable demand conditions in dishwashing & household insecticides due to change in consumption pattern (higher sales of in-home' consuming products & heightened cautiousness for mosquito related disease). Moreover, with stronger demand from rural India due to reverse migration & increased government's spends, the company was able to leverage that macro factor by driving growth from smaller SKUs of | 5 & | 10 across brands. Moreover, the company has added more sub-stockist...

EBITDA margin improved by 220 bps to 17.7% despite decline in gross margins (240bps YoY) mainly due to reduction in ad-spend (4.6% of sales Vs 8% YoY). Excluding exceptional spend of Rs5cr (Covid donation) EBITDA margin was 18.8%. However, the company expects the EBITDA margins to be in the range of 15%-16% for FY21E considering the current uncertain situation and likely increase in ad-spend in the coming quarters. Focus on lower unit packs which do not have any trade schemes (higher margins) and benign raw materials will support margins. The company has decided to opt for concessional income tax rate from FY27 onwards once the benefits under 80IE are utilised (till FY26).We expect PAT growth of 16% CAGR over FY19-22E....

5 August 2020 Jyothy Laboratories (JYL) 1QFY21 results were above our low expectations. Sales growth was up only 4%. Ad-spend reduction of 40% (much higher than peers) drove EBITDA margin beat, despite gross margin being much below expectations. Despite being much smaller than its peers under our coverage, the company has reported mere 2.5% sales CAGR over the past 5 years and neither the management commentary for Jul20, rest of the year or subsequent years indicates a substantial revival to steady-state double-digit sales growth. Double-digit sales growth in FY21E is only because of low base due to 24% sales decline seen in 4QFY20. 1QFY21 standalone net sales grew 4.1% YoY to INR4.3b (v/s est. EBITDA grew 19.4% YoY to INR782m (v/s est.

Jyothy Labs Ltd. (Formerly known as Jyothy Laboratories Ltd.) reported its Q4FY20 results recently. The key highlights are as follows: 1. The consolidated revenue declined by 24% YoY to `393Crs due to significant decrease in Household Insecticides (HI) and Personal Care business. Nationwide lockdown due to...

Jyothy Laboratories Ltd (JLL) is an Indian FMCG player with products across Fabric care, Dishwashing, Mosquito repellents & Personal Care. We revise down our target to Rs135 on account of COVID-19 led disruption but maintain Accumulate due to drop in stock price. For Q4FY20, revenue de-grew by ~24%YoY. ~Rs.150cr impacted due to COVID-19 led disruption in year end seasonal sales. EBITDA margin declined sharply by 550bps YoY due to fall in sales along with fixed costs (staff and committed advertisement costs)....

While the company reported positive sales in April and May, faster recovery from COVID-19 in Kerala and a good ongoing Household Insecticides (HI) season are likely to have played a bigger role in the pace of growth than any structural change. For a company with a far lower sales base (INR17.1b in FY20) v/s peers, performance over the past five years has been consistently lackluster, with a single-digit CAGR in sales (2.5% CAGR) and operating profit (9% CAGR). ROCE at 13% is also far inferior to that of peers; moreover, no uptick is visible from a medium-term horizon, justifying the valuation of 14x EV/EBITDA (at a 60% discount to peers). to INR3.8b to 44.7% in 4QFY20. Conversely, the EBITDA margin contracted by 590bp YoY to 10.5%. In terms of performance, Fabric Care, Personal Care, HI, Dishwashing, and other product sales declined ~17%, ~36%, ~36%, ~21%, and ~15%, respectively.