Sharekhan's research report on Jyothy Labs
Jyothy Labs Limited (JLL) posted good operating performance in a tough demand environment with revenue growing by 12.6% y-o-y; volume growth of 1.4%; gross margins and OPM expanded by 37 bps and 83 bps, y-o-y respectively; PAT grew by 33% y-o-y to Rs. 58.3 crore. Excluding household insecticide (HI), volume growth stood at 5.8% (fabric care achieved 20% volume growth). Management expects sales volume to recover in the coming quarters with inflationary pressure receding. Reduction in raw-material prices and better operating leverage through scaling up of the operations will help in achieving consistent improvement in OPM in the coming quarters.
The stock is currently trading at discounted valuation of 31.4x/23.1x its FY2023E/FY2024E EPS. We maintain Buy with a revised PT of Rs. 225.