Buy Jyothy Labs: target of Rs 170: Sharekhan
Sharekhan is bullish on Jyothy Labs has recommended buy rating on the stock with a target price of Rs 170 in its research report dated December 23, 2020.
December 24, 2020 / 11:18 AM IST
Sharekhan's research report on Jyothy Labs
Volume growth momentum to sustain in Q3 with dishwashing and personal care categories likely to maintain double-digit growth, while fabric care recovered to 100%. HI with large presence in North and East is a seasonally weak quarter but will grow on a y-o-y basis. With some of the key input prices (including packaging material and palm oil), gross margins are expected to be lower on a y-o-y basis. The company will be taking price hike of 3%-5% in soaps. Savings at manufacturing and other expenses will support OPM in the near term. Medium-term revenue drivers are new product additions, optimal utilisation of existing distribution reach, and improved penetration in the rural market. OPM is expected to sustain at 16%-17%.
We retain our Buy recommendation on Jyothy Labs Limited (JLL) with an unchanged price target of Rs. 170; discounted valuation at 19x its FY2023E EPS with stable growth prospects in the medium terms makes it a good pick in the consumer goods space.
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