The average trading volumes at the counter jumped over five-fold today. A combined 6.37 million equity shares representing 1.7 per cent of total equity of Jyothy Labs changed hands on the NSE and BSE till 02:58 PM. In comparison, the S&P BSE Sensex was down 0.47 per cent at 65,520.
In past three months, the stock price of Jyothy Labs has zoomed 91 per cent as the company reported a strong operational performance for the June quarter (Q1FY24).
The company’s earnings before interest, taxes, depreciation, and amortization (EBITDA) margins for the quarter improved 710 bps to 17.1 per cent against 10 per cent in a year ago quarter, due to moderating input costs. Net profit more-than-doubled or was up 101.7 per cent year-on-year (YoY) at Rs 96.3 crore from Rs 47.7 crore in Q1FY23.
The management said, with rising disposable income of discerning and aspirational consumers, the company’s efforts are towards increasing engagement with consumers, expanding its sales and distribution network, focus on relevant innovations thereby strengthening core business.
Net sales grew 15.1 per cent YoY at Rs 687 crore. The company has delivered a consistent double digit revenue growth for the last few years and rise in its brands market share. This is coupled with healthy cash position empowering future growth, the management said.
Jyothy Labs is one of the leading Indian fast moving consumer goods (FMCG) Companies with a single brand ‘Ujala’ which has evolved into a multi brand. The company involved in the manufacturing and marketing of products in fabric care, dishwash, household insecticide and personal care.
The company has leading brands like Ujala, Maxo, Exo, Henko, Pril, Margo, Mr. White, T-Shine, Neem, Maya and MoreLight that are well-known and established brands in their respective categories.
Last month, CARE Ratings reaffirmed ratings of the company’s long-term bank facilities with a stable outlook. The reaffirmation of the ratings for the bank facilities and debt instruments of Jyothy Labs is driven by its wellestablished market position in the domestic fast moving consumer goods (FMCG) market, particularly within the detergents and dishwashing segments, showcased by its renowned brands – Ujala, Pril, and Exo, rating agency said in rationale.
CARE Ratings expect Jyothy Labs to continue maintaining its market position in the FMCG sector in India driven by its growing presence and evolving products.
Product innovation and availability of relevant product assortment for general trade/e-Commerce/modern trade and distribution expansion will help Jyothy Labs gain market share in key categories, according to the brokerage firm Sharekhan.
The brokerage firm expects Jyothy Labs revenue and PAT to grow at CAGR of 13 per cent and 27 per cent over FY2023-26E. The stock has seen a good run-up in the recent times and is trading at 37x/31x its FY2024E/FY2025E EPS, which is at discount to the valuation of some of the mid-large consumer good companies.
Improving cash flows, a focus on sustaining double-digit revenue growth with decent volume growth and strong earnings visibility make it a good small-to-mid cap pick in the consumer goods space, Sharekhan said.
 "Jyothy Labs soars 14% on heavy volumes; zooms 91% in 3 months")