Accumulate Jyothy Labs target of Rs 165: Geojit

Geojit’s research report on Jyothy Labs

Jyothy Laboratories Ltd (JLL) is an Indian FMCG player with products across Fabric care, Dishwashing, Mosquito repellents & Personal Care. We revised down our target to Rs165 (from Rs.190) due to short-term pressure on margins but maintain Accumulate rating given healthy topline growth, and recent correction in stock price. Q3FY22 revenue grew by 13%YoY (2Yr cagr of 13% from pre-covid period), aided by volume growth (+7% YoY) and price hike. Growth was healthy across all major segments, Fabric care (19%YoY), Dishwash (11%), and Household Insecticides at 10%YoY. Personal care growth was flat YoY on a very high base (+48% in Q3FY21). Improved mobility in urban areas aided improvement in Modern Trade (MT) channel and Canteen Stores Department (CSD) sales. However, resurgence of Covid cases may impact footfalls in the short-term. EBITDA margin declined by 540bps YoY to 11.3% (Vs.11.4% in Q2FY22 & 12% in Q1FY22) due to 710bps reduction in Gross margin on account of sharp increase in input prices. Some input prices have peaked out, but some are still at higher levels. We factor revenue/earnings to grow at ~12%/13% CAGR over FY21-24E and value JLL at 24x FY23 P/E. .

Outlook

We maintain Accumulate rating considering recent correction in the stock price with a revised Target of Rs.165 (earlier Rs.190) based on 24x FY23E EPS.

More Info on Trent

At 16:00 hrs Jyothy Labs was quoting at Rs 140.40, down Rs 0.70, or 0.50 percent.

It has touched an intraday high of Rs 144.05 and an intraday low of Rs 140.40.

It was trading with volumes of 11,795 shares, compared to its thirty day average of 39,587 shares, a decrease of -70.20 percent.

In the previous trading session, the share closed up 0.11 percent or Rs 0.15 at Rs 141.10.

The share touched its 52-week high Rs 187.20 and 52-week low Rs 133.00 on 06 July, 2021 and 25 January, 2022, respectively.

Currently, it is trading 25 percent below its 52-week high and 5.56 percent above its 52-week low.

Market capitalisation stands at Rs 5,155.61 crore.

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