Buy Jyothy Labs Ltd For Target Rs. 620 By Sushil Finance
Follow us Now on Telegram ! Get daily 10 - 12 important updates on Business, Finance and Investment. Join our Telegram Channel
Highlights from the Quarter (Q2FY25):
Jyothy Labs Ltd (JLL) reported a flat quarterly net revenue of Rs.746.3cr for Q2FY25, marginally lower by 1.2% YoY and flat on a QoQ basis. The company reported an EBITDA of Rs.151.0cr for the quarter vs Rs.148.6cr for the same quarter in the previous year, and Rs.147.2cr in the preceding quarter. Subsequently, the company posted a net profit of Rs.105.0cr for the quarter. The company observed a 0.2% value growth and 3% volume growth this quarter against a base of 11% value growth in the same period last year. This variance between value and volume growth is primarily due to increased grammages and price cuts for certain SKU’s. JLL has roped in Vidya Balan as the new brand ambassador for Ujala Supreme. The Ujala Crisp & Shine campaign, featuring Nayanthara, is doing well in the Southern markets. In Kerala, Ujala IDD detergent powder gained a market share of 23.9% in the quarter, thanks to a multimedia campaign featuring celebrity Manju Warrier. Additionally, the company has launched exclusive liquid detergent packs for the Henko brand and are continuing to actively sample in target markets. According to the management, the EBITDA margin expansion for the quarter implies enhanced operational efficiency. The company's 7% volume growth at the half-year mark demonstrates that its strategy and activities can sustain growth. Their brand's increasing market share demonstrates their strong consumer trust. JLL’s future strategy includes increasing the distribution network in rural markets and establishing direct retail presence.
OUTLOOK AND VALUATION
Jyothy Labs Ltd posted a flat quarter in terms of revenue numbers. However, on the back of improved EBITDA margins and increased distribution network, the management remains confident of improved growth and margins in the second half of the financial year. Therefore, we expect FY26E revenue at Rs.3821.6cr, EBITDA of Rs.718.5cr at an EBITDA margin of 16.1% and PAT of Rs.256.7 cr. We estimate FY26E EPS at Rs.18.1, and assign a PE multiple of 40x, maintaining the target price of Rs.620 (upside ~43.6%) from the current market price of Rs.434. We maintain our BUY Rating for Jyothy Labs Ltd over an investment horizon of 24-30 months.
Please refer disclaimer at https://www.sushilfinance.com/Disclamier/disclaimer
Member : BSE/ NSE/ MSEI. SEBI Registration No.-INZ000165135.
