Buy Jyothy Labs; target of Rs 590: Sharekhan

Sharekhan's research report on Jyothy Labs

Jyothy Labs Limited (JLL) posted yet another quarter of stellar performance in Q3FY24 with revenue and PAT growing by 11% and 35% y-o-y, respectively; OPM standing high at 17.5% Domestic volume growth of 11% is ahead of some large peers; management is confident of maintaining volume-led double-digit revenue growth in FY2024. It targets OPM of 16-17%. Distribution expansion in new markets, product launches, market share gains in key categories and expanding into new categories would help JLL to achieve consistent double-digit revenue growth in the coming years.

Outlook

Stock trades at 45x/39x its FY2025E/FY2026E earnings. In view of consistent delivery of strong operating performance versus peers and good growth prospects ahead, we maintain a Buy with revised PT of Rs. 590.