Neutral Jyothy Laboratories; target of Rs 565: Motilal Oswal

Motilal Oswal's research report on Jyothy Laboratories

Jyothy Laboratories (JYL) reported a revenue growth of 8% YoY (in line) in 1QFY25. It delivered a volume growth of 11% and continued to focus on volume-led growth to gain market share across categories. The company is not expecting price hike-led growth in FY25. Fabric care delivered 9% growth, with growth from both main-wash and post-wash categories. Dish-wash growth stood at 7% YoY, led by LUPs. Exo's market share in the eastern region increased from low-single digits to double digits. HI grew 2% YoY only, hurt by the extended and harsh summer. Personal care was weaker than expected, clocking 11% YoY growth (vs. ~21% growth in FY24).

Outlook

We believe that the margin-led growth will be normalized in FY25. From here on, market share gains and the success of new launches will be critical for JYL’s earnings growth. Due to its expensive valuations, we reiterate our Neutral rating on the stock with a TP of INR565 (premised on 45x Jun’26E P/E).