MOSL: JYOTHY LABORATORIES (Neutral): Mixed performance; Growth outlook maintained
Jyothy Laboratories: Mixed performance; Growth outlook maintained
(JYL IN, Mkt Cap USD1.0b, CMP INR363, TP INR380, 5% Upside, Neutral)
- net sales grew 12.3% YoY to INR4.3b. Reported power brand sales grew just 9.3% YoY. EBITDA rose 36.8% YoY to INR693m (est. of INR610m). Adj. PAT after non-controlling interest (NCI) grew 61.5% YoY to INR347m (est. of INR347m). Fabric care, Dishwashing and Personal care grew 9%, 12.4% and 30.9%, respectively, while Household Insecticides fell 17.1% YoY.
- gross margin expanded 270bp YoY to 48.3%. Other expenses declined by 80bp YoY, while staff costs and A&P rose 10bp and 50bp, respectively. Thus, consolidated EBITDA margin expanded 290bp YoY to 16.1%.
- Concall highlights: (1) Management reiterated positive rural growth outlook stated by them in the 2QFY18 call. (2) Volume growth of 8-10% is sustainable for JYL, going forward. (3) Wholesale trade has largely stabilized; only some parts of UP, Bihar and West Bengal are seeing some wholesale trade pressure.
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.
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