Buy Jyothy Labs; target of Rs 268: Angel Broking

Angel Broking is bullish on Jyothy Laboratories and has recommended buy rating on the stock with a target of Rs 268 in its May 28, 2012 research report.

“Jyothy Laboratories Ltd.’s (JLL) standalone results came in better than our expectations during 4QFY2012. On the revenue front, it reported 37.5% yoy growth to `219cr, with operating profit margin improving by 614bp yoy to 16.6%. Raw-material cost as a percentage of net sales increased sharply during the quarter; however, lower employee cost offset the same and helped the margin to sustain its level. Profit for the quarter grew by 25.7% yoy to `28cr. We maintain our Buy recommendation on JLL.”

“Henkel India (HIL) reported a healthy 30.8% qoq growth in net sales at `101cr and operating margin of 4.4%, an improvement of 130bp on qoq basis. However, the bottomline was still in negative zone with a loss of `8cr. We expect JLL’s consolidated revenue to post a CAGR of 31.0% to `1,568cr with an operating margin of 11.1% and profit to post a CAGR of 40.2% to `88cr over FY2012-14E. We maintain Buy on JLL with an SOTP target price of `268,” says Angel Broking research report.   

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