MOSL: JYOTHY LABORATORIES (Neutral)-Operating performance again misses estimates
JYOTHY LABORATORIES: Operating performance again misses estimates; remain Neutral
(JYL IN, Mkt Cap USD0.9b, CMP INR169, TP INR175, 3% Upside, Neutral)
- 4QFY19 standalone net sales were up 6.3% YoY to INR5b (v/s est. of INR5.1b). EBITDA declined 6% YoY to INR826m (v/s est. of INR911m). Adj. PAT grew 11.1% YoY to INR670m (v/s our est. of INR605m) as 4Q19 saw deferred tax gain of INR110.3m v/s INR82.5m loss in the base quarter.
- Segmental performance: Fabric care, Dishwashing and Personal care sales grew 2.2%, 21.6% and 2.8%, while Household Insecticides (HI) sales were down 4.4% YoY.
- Gross margins contracted 220bp YoY to 44.5% in 4QFY19. Higher ad spends as % of sales (+100bp YoY to 6.2%) and increased staff cost as % of sales (+70bp YoY to 9.7%) were offset by lower other expenses (-170bp YoY to 12.2% of sales); thereby, EBITDA margin contracted 210bp YoY (16.4% v/s est. of 18%).
- Standalone FY19 performance: Sales, EBITDA and Adj. PAT grew 9%, 8% and 20%, respectively. EBITDA margin was down 10bp YoY to 16.2%.
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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