ICICI Securitie`s research report on Jyothy Laboratories
Jyothy Laboratories (JYL) reported 1% YoY sales growth (below our est.) in 4QFY25. Volume growth was 4% (est. 7%, 8% in 3QFY25). The gap between volume and value growth was due to higher grammage and promotional price subs in select categories. Fabric Care delivered 2% value growth (led by liquid detergents), EBIT margin contracted by 60bp YoY to 22.4%, and EBIT declined by 1% YoY. Liquid detergent saw strong growth (20-25%), but the mix is small for JYL as of now. Segment EBIT margin can be 23-24% in the medium term.
Outlook
We estimate a CAGR of 8%/9% in revenue/EBITDA during FY25-27E. However, sustaining the operating margins will be challenging due to relatively slow revenue growth and competitive pressure. Going forward, market share gains and the success of new launches will be crucial for JYL’s earnings growth. We reiterate our Neutral rating on the stock with a TP of INR 375 (premised on 30x FY27E P/E).
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