Sharekhan's research repor on Jyothy Laboratories
Jyothy Laboratories Limited (JLL) posted better-than-expected performance in Q1FY2021, with revenue and PAT growing by 2.5% and 25.3%, respectively, OPM expanded by 215 bps to 17.7%. Domestic business volume growth stood at 6%.. JLL's Q1 performance was boosted by strong 150% growth in the household insecticide (HI) segment and 17% growth in the dishwashing segment. The fabric care segment posted a decline of 24%, affected by lower demand for post wash during the lockdown.. Recovery continues on month-on-month basis and the company continues to witness growth in July 2020 (with rural market growth staying ahead of the urban market). The HI, hygiene, and dishwashing segments would drive growth in the near term. OPM is expected to sustain at around 16%. We have revised our earnings estimates by 8-9% for FY2021/FY2022.
Outlook
We maintain our Buy recommendation on the stock with a revised PT of Rs. 170.
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