Sharekhan's research report on Jyothy Labs
Management retained double-digit revenue growth guidance for medium to long term which will be largely led by higher sales volume driven by defined strategies of distribution expansion, product launches and higher consumer connect. As raw material prices fall and volume growth is set to recover, OPM is expected to bounce back to 15% in FY2024. Better revenue mix with increase in contribution of high margin products (including LVs in household insecticide category) will further drive margins. Company had net cash of Rs. 85crore in FY2022. Consistent improvement in cash with stable working capital and improved earnings growth, the cash flows will improve in the coming years. RoE/RoCE likely to reach at around 20% in FY2024.
We retain a Buy on Jyothy Labs (JLL) with revised a price target of Rs. 215. The stock trades at 30.8x/22.9x its FY2023/24E earnings. Better growth prospects and a strengthening balance sheet make JLL a good pick in the mid-cap space.
At 15:07 hrs Jyothy Labs was quoting at Rs 183.35, up Rs 2.55, or 1.41 percent.
It has touched an intraday high of Rs 186.20 and an intraday low of Rs 182.20.
It was trading with volumes of 26,470 shares, compared to its thirty day average of 58,801 shares, a decrease of -54.98 percent.
In the previous trading session, the share closed up 0.86 percent or Rs 1.55 at Rs 180.80.
The share touched its 52-week high Rs 198.20 and 52-week low Rs 130.00 on 29 August, 2022 and 25 February, 2022, respectively.
Currently, it is trading 7.49 percent below its 52-week high and 41.04 percent above its 52-week low.
Market capitalisation stands at Rs 6,732.77 crore.
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