Buy Jyothy Labs; target of Rs 275: Sharekhan

buy

Sharekhan's research report on Jyothy Labs

JLL’s earnings are expected to grow at CAGR of 25% over FY2023-25E with revenues expected to grow in low teens, while consistent EBIDTA margins expansion would drive strong double-digit earnings growth. The company remains debt free with cash on books at Rs. 283 crore, which it will be utilising for inorganic initiatives and higher investments behind brands. Return profile would improve with RoE/RoCE expected to rise to 20% and 24%, respectively in FY2025E versus 15.4% and 19.1% in FY2023 on back of consistent improvement in the profitability and better working capital management.

Outlook

We retain a Buy rating on Jyothy Labs (JLL) with revised price target of Rs. 275. The stock is trading at 29.2x/24.3x its FY24E/FY25E earnings, which is at a discount to some large consumer goods stocks.

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Jyothy Labs - 08 -07 - 2023 - khan