Neutral Jyothy Laboratories; target of Rs 500: Motilal Oswal

Motilal Oswal recommended Neutral rating on Jyothy Laboratories with a target price of Rs 500 in its research report dated February 01, 2024.

Broker Research

February 07, 2024 / 19:32 IST

Neutral

26 Aug, 2025 12:21

Volume

Todays L/H

Motilal Oswal's research report on Jyothy Laboratories

Jyothy Laboratories (JYL) reported an in-line sales at INR 6.7b, a growth of 11% YoY (four-year CAGR at 13.6%). Volume growth stood at 11% YoY. Fabric care sustained double-digit growth (12%); healthy demand seen in the mid-price detergent powder. Dishwashing growth was slightly slow at 7%, after clocking a double-digit growth in 1HFY24, driven by competition from local or regional players. HI remained weak at 5% YoY growth; fouryear CAGR stood at 2%. Gross margin tailwinds continued; GM was up 650/50bp YoY/QoQ to 50%. Thereby, EBITDA margin saw an improvement of 350bp to 17.5% (continue to enjoy historically best margin). We model 10%/11% revenue/EBITDA CAGR over FY24-26E. With a stable RM basket, we expect EBITDA margin to sustain at 17-18%. We believe a large part of GM led earnings growth witnessed in 9MFY24 will be normalized in FY25.

Outlook

Here onwards, market share gain and success of new launches will be critical drivers for earnings growth. With rich valuation, we maintain our Neutral rating with a TP of INR 500 on 40x Dec’25E.

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