ICICI Direct recommended Hold rating on Jyothy Laboratories with a target price of Rs 185 in its research report dated October 23, 2019.
ICICI Direct's research report on Jyothy Laboratories
Jyothy Labs (JLL)’s revenue grew 8.5% to Rs 464.2 crore fully led by 8.3% YoY volume growth as 13.1% YoY growth in fabric care and 8.6% YoY growth in dishwashing segment supported topline growth. However, household insecticides (HI) segment contracted by 1.2% YoY impacted by delayed monsoon in key states and high competitive intensity from unorganised incense stick players. EBITDA margins remained flat at 17% during the quarter as a decline in other overheads to sales (129 bps) on account of Ind-AS accounting, was offset by higher investment towards A&P spend to sales by 67 bps. PAT increased 17.4% YoY to Rs 53.2 crore benefitting from lower tax rates.
Moreover, lower presence in high growing north India market also put the company in a relatively disadvantageous position. We maintain our HOLD recommendation on the stock with a revised target price of Rs 185/share.
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