Shares of Jyothy Labs neared their 52-week high levels of ₹466 after reporting decent July-September results for fiscal 2023-24 (Q2FY24). Domestic brokerage firm Religare Broking has revised its rating on the mid-cap stock to “accumulate” or “continue to hold” after the “high conviction” target was achieved by 27 percent by the end of September 2023.
At current market price (CMP) of ₹419, Religare gave a target price of ₹466 for Jyothi Labs and sees a potential of 11.2 percent on the stock. On Thursday, shares of Jyothi Labs settled 4.29 percent lower at RS 439.20 on the BSE.
Jyothy Labs Q2 Results
Jyothy Labs reported a consolidated net profit of ₹103.98 crore in the September quarter, up 59.1 percent from ₹65.35 crore recorded a year ago. The company’s revenue from operations in the second quarter of the current fiscal stood at ₹732.34 crores, registering a growth of 11.09 percent, as compared to ₹659.20 crore in the previous year period.
The company’s earnings before interest, tax, depreciation and amortization (EBIDTA) for the September quarter stood at ₹135 crore increasing by 69 percent year-on-year (YoY). The EBIDTA margin was at 18.5 percent in the quarter-under-review.
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“Demand across our product portfolio has been stable. The inflationary environment has been a constant pressure on the consumption of FMCG products, however due to our business potential, we continue to expand our distribution footprint across India and further strengthen our brands, which has resulted in consistent business growth. ” said Mr. Jyothy, Managing Director. , Jyothy Labs Limited.
Jyothy Labs reports robust margin, segment growth
The company’s gross profit grew by 35 percent YoY to ₹360 crore with a margin improvement of 870 basis points YoY to 49.2 percent led by lower raw material prices and strong volume growth.
The fabric care segment (~43 percent of revenue) grew by 10.6 percent YoY to ₹316.6 crore and posted the profit (~61 percent of profit) of ₹82.8 crore, higher by 91 percent YoY led by launch of new SKUs, emphasis on distribution channels and sampling initiatives. Further, laundry profit grew by 48.6 percent YoY to ₹52.3 crore driven by adding new customers in its Exo & Pril brands, focusing on large packages and investing in strengthening brand equity.
Religare’s perspective on Jyothy Labs
”Jyothi Labs reported decent Q2FY24 results led by growth across most of its segments, strong volume growth and healthy ad spend. Further, the management plan is to drive volume growth, invest behind its core brands by innovating more products and adding categories and continue to strengthen distribution reach,” the brokerage said in its report.
”On the financials, revenue/EBITDA is estimated to grow at 15%/42.5% CAGR over FY23-25E as we are bullish on Jyothy Labs’ growth outlook and revise estimate to Accumulate with target price to. ₹466,” said Religare Broking.
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Updated: 16 Nov 2023, 19:56 IST