Jyothy Labs Ltd. share price target

The revival of consumer sentiment has been reflected in the company's performance across the brand portfolio. The company has been focusing on volume led sales growth, brand building, product innovation, and cost rationalization measures leading...

Essential hygiene products and rural demand aided growth. For Q3FY21, revenue grew by 13%YoY backed by strong growth in Dishwashing (21%YoY), Personal care (48% YoY), and Household Insecticides-HI (10%YoY) segments on YoY basis. JLL's enhanced focus on essential hygiene products along with strong rural demand aided volume growth. Fabric care grew by 2% YoY Vs de-growth in the last 4 quarters. Covid-19 and Work from home trends have changed consumer preferences more towards essential & hygiene products. JLL's ~85% of the product portfolio comprises of essential & hygiene products. The company added Exo All...

New products, SKUs driving growth in dishwashing Dishwashing is 38% of total sales and has seen robust growth of 20.6% in 9MFY21. We believe new variants & smaller pack in rural regions have been driving growth for the company. In last two years, JLL has launched two variants under Pril Brands (Tamarind & Lime). Further, it has launched dishwash gel, vegetable cleaner & disinfectant & smaller pouches. We believe the growth momentum would continue in the category given it is penetration led. Moreover, few scalable variants at other regions would...

While higher than expected operating margin and lower interest cost led to in line EBITDA and a beat on PAT, there is nothing to indicate that the sales trajectory going forward is going to recover sharply from the measly 2.5% CAGR in the past five years ending FY20. We maintain our Neutral rating on the stock. JYL's 3QFY21 standalone net sales grew 15.3% YoY to INR4.7b (v/s our estimate of INR4.9b). Volumes rose by ~15% YoY. Standalone gross margin expanded 70bp YoY to 48.3% in 3QFY21....

We retain our Buy recommendation on Jyothy Labs Limited (JLL) with an unchanged price target of Rs. 170; discounted valuation at 19x its FY2023E EPS with stable growth prospects in the medium terms makes it a good pick in the consumer goods space. Volume growth momentum to sustain in Q3 with dishwashing and personal care categories likely to maintain double-digit growth, while fabric care recovered to 100%. HI with large presence in North and East is a seasonally weak quarter but will grow on a y-o-y basis. With some of the key input prices (including packaging material and palm oil), gross margins are expected to be lower on a y-o-y basis. The company will be taking price hike of 3%-5%...

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...

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....