Geojit Financial Services research report on Jyothy Labs
For Q1FY25, revenue grew by 8%YoY, mainly driven by volume. Main segments, fabric care and dishwash (77% of total sales), grew by ~9% and ~7% YoY, respectively. Personal care and household insecticides grew by ~11% and 2% YoY, respectively. Operating profit grew by ~14%YoY, mainly aided by 340bps YoY improvement in gross margin to 51.3%. Ad spends have increased by 22% YoY for the quarter. Despite this, EBITDA margin improved by 90bps YoY to 18%. The company is not considering price increases, and instead, is focussing on volume growth, with a margin guidance of 16%-17%. Rural demand is witnessing a gradual uptick. Good monsoon along with GoI’s initiatives to improve demand augurs well for the company. We expect revenue/earnings to grow at ~11%/15% CAGR over FY24-26E. We value JLL at 45x Sept 2026 EPS.
Outlook
Jyothy Labs Ltd. (JLL) is an Indian FMCG player with products across fabric care, dishwashing, mosquito repellents & personal care. We revise our target price to Rs.645 (from Rs. 478), maintaining our Accumulate rating considering the good performance in the quarter.
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