Jyothy Labs Ltd. share price target

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)....

Jyothy Labs (JLL) posted a disappointing set of numbers with 24% revenue & 22% volume decline as the company lost last 10 days of sales. JLL lost | 150 crore sales due to lockdown. Fabric care & dishwashing category revenues saw de-growth of 16.5% & 21.4%, respectively. Further decline in household insecticides (HI) & personal care category revenue was even sharper at 36% each. This was explained by the management as loss of preseason stocking with trade channel. However, such a sharp decline in all categories seems to be more than 20-25 days sales loss, which depicts strategy of pushing inventory to trade at the end of quarter/year. Operating...

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.

Jyothy Labs Limited (JLL) registered disappointing performance in Q4FY2020, with consolidated revenues and PAT declining by ~24% and 60%, (volumes fell by 22%). OPM dropped by 544 bps to 10.3% affected by lower operating leverage. The inventory filling of seasonal products such as household insecticides (Maxo mosquito repellents) and soaps (Margo) with distributors was affected by lockdown at the end of March 2020 (impact on revenues and PAT was Rs. 150 crore and Rs. 50 crore respectively). However, with strong leftover inventory, April and May saw sales growing y-o-y despite lower...

Jyothy Labs Limited (JLL) registered disappointing performance in Q4FY2020, with consolidated revenues and PAT declining by ~24% and 60%, (volumes fell by 22%). OPM dropped by 544 bps to 10.3% affected by lower operating leverage. The inventory filling of seasonal products such as household insecticides (Maxo mosquito repellents) and soaps (Margo) with distributors was affected by lockdown at the end of March 2020 (impact on revenues and PAT was Rs. 150 crore and Rs. 50 crore respectively). However, with strong leftover inventory, April and May saw sales growing y-o-y despite lower...

Jyothy Laboratories Ltd (JLL) is an Indian FMCG player with products across Fabric care, Dishwashing, Mosquito repellents & Personal Care. We maintain our Accumulate rating with a revised target of Rs169 on account of recent fall in valuation. JLL's revenue de-grew by 5.9%YoY for Q3FY20 led by demand...

5 February 2020 Jyothy Labroratories (JYL) 3QFY20 results were disappointing on all fronts. According to management, part of the impact was due to unusually low off- take in the CDS channel, which should normalize in the next quarter. With weak earnings growth expectations even on a low base and low RoEs compared to peers, we believe that valuations, while at discount to peers, are justified. EBITDA declined 9.3% YoY to INR651m (v/s est. PBT declined 24% YoY to INR441m (v/s est.