Jyothy Laboratories' Q4FY18 results (Outperformer) - Revenues and margins surprise!
Q4FY18 result highlights
- Jyothy Laboratories’ (JYL) consolidated net revenues increased by 15.8% yoy to Rs5.2bn (est: Rs4.9bn), EBITDA increased by 45% yoy to Rs884m (est: Rs758m), Adj PBT was up 56% yoy to Rs700m (est: Rs580m) and Reported PAT was down 29% yoy to 759m, due to reversal on set off losses of JCPML with JLL in base quarter.
- Comparable net sales increased by 17% yoy with a volume growth of 11.4%. The growth was led by Fabric care, Dishwash & Personal care which grew by 13.6%, 21.3% and 56% yoy. HI sales grew by 8.7% yoy.
- Gross margins improved by 670bp yoy to 50.6%. Staff cost increased 16% yoy, A&P spends were up 91% yoy while other expenses increased by 9% yoy. Resultant EBITDA increased by 45% yoy; margins expanded 350bps to 17.1%.
- PBT before exceptional items (excluding income from land sale of Rs 370m) was up 56% yoy.
Key positives: Strong growth in Fabric care, dishwash and personal care
Impact on financials: Our earnings estimates remain largely unchanged
Valuations & view
JYL’s near perfect quarter has been led by market share improvements as well as growth led by GST price cuts in November. With two consecutive quarters of 11%+ volume growth and benefits of base and price cuts to continue accruing, the company is firmly placed to maintain its double digit growth trajectory. With improvements in products like Ujala, Maxo and Henko, we believe JYL is now realizing the benefits of a diverse portfolio. We are factoring 14% revenue CAGR for the company over FY18-20E driven by volumes. Further, improving margins and a lower interest cost will drive 27% earnings CAGR for JYL over FY18-20E. We expect JYL’s earnings growth over the next two years to be the highest among our FMCG coverage universe; maintain Outperformer.
Jyothy Labs Limited, formerly Jyothy Laboratories Limited, is a multi-brand, multi-product company focused on fast-moving consumer goods industry. The Company is principally engaged in manufacturing and marketing of fabric whiteners, soaps, detergents, mosquito repellents, scrubber, bodycare and incense sticks. It operates through three segments: Soaps and Detergents, which includes fabric whiteners, fabric detergents, dish wash bar and soaps, including ayurvedic soaps; Home Care products, which includes incense sticks, scrubber, dhoop and mosquito repellents, and Others, which includes bodycare, tea and coffee. It products are under various brands, which include Henko, Mr. White, Ujala, More light, Chek, Pril, Exo, Maxo, Margo, Fa, Neem, Fabric Spa, Snoways, Busy easy and Wardrobe. Its subsidiaries include Jyothy Consumer Products Marketing Limited, Four Seasons Drycleaning Company Private Limited, Snoways Laundrers & Drycleaners Private Limited and Jyothy Fabricare Services Limited.
IDFC Securities Ltd., a subsidiary of the Infrastructure Development Finance Company (IDFC) wherein the Government of India holds a 20% interest, is India's leading equities broker catering to most of the prominent financial institutions, both foreign and domestic investing in Indian equities. A research team of experienced and dedicated experts ensures the flow of critically investigated stock ideas and portfolio strategies for our clients. Our coverage spans across various growth sectors such as agriculture, automobiles, Consumer Goods, Technology, Healthcare, Infrastructure, Media, Power, Real Estate, Telecom, Capital Goods, Logistics, Cement amongst other sectors. Our clients value us for our strong research-led investment ideas, superior client servicing track record and exceptional execution skills.
Unfortunately, this report is not available for the investor type or country you selected.
Browse all ResearchPool reportsReport is subscription only.
Thank you, your report is ready.
Thank you, your report is ready.