MOSL: JYOTHY LABORATORIES (Neutral)-A moderate performance given low base, uptick seen in RM prices
Jyothy Laboratories: A moderate performance given low base, uptick seen in RM prices
(JYL IN,Mkt Cap USD1.2b, CMP INR226, TP INR220, 3% Downside, Neutral)
- Reported standalone net sales were up 17.8% YoY to INR4.05b in 1QFY19. Press release stated that GST comparable sales were up 20.6% YoY, with 18.5% comparable volume growth. EBITDA grew 39.8% YoY to INR610m. Adj. PAT increased 57.1% YoY to INR324m.
- The company has provided only standalone results for 1QFY19, while our forecasts were on a consolidated basis and the company previously used to report results on both standalone and consolidated basis. Net sales, EBITDA and PAT on both consolidated and standalone basis were extremely weak in the base quarter (1QFY18; standalone sales were down by 16% and PAT by 53% YoY) in the run up to GST implementation, and thus, 1QFY19 results have to be seen in conjunction with that.
- Gross margin shrank sharply by 240bp YoY to 47.4% in 1QFY19. EBITDA margin, however, expanded 240bp YoY to 15.1% due to lower A&P cost (-120bp YoY to 7.8% of sales), other expenses (-320bp YoY to 12.9%) and staff costs (-40bp YoY to 11.7%).
- Conference call takeaways: (1) Demand scenario is getting better compared to the previous two years, led by rural market. (2) Company is targeting sales growth of 15% for FY19, led by 10-12% volume growth.
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.
Motilal Oswal Financial Services Ltd. is a reputed name in Financial Services and Online Trading with group companies providing services such as Private Wealth Management, Retail Broking and Distribution, Institutional Broking, Asset Management, Investment Banking, Private Equity, Commodity Broking, Currency Broking, Principal Strategies & Home Finance.
Motilal Oswal Securities is a group company of Motilal Oswal Financial Service Limited which started as a stock trading company and has blossomed into well diversified firm offering a range of financial products and services. Motilal Oswal has built a reputation as the source for best stock trading company and this has taken a wealth of experience, knowledge and expertise, constantly working in tandem, over the years.
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