Jyothi Labs up 54% from February low on D-Street, dividend yield of 1.25%

Jyothi Labs is the No 1 player in the fabric whitener market with a market share of 84.4% in the country. In addition, the company ranks second in the dishwashing bar and liquid market and in the mosquito repellent coil market.

in present, store is on 200 Points – Well placed for purchase to get double digit returns in the short term.

HDFC Securities Fundamental Research Analyst Harsh Sheth has a buy on Jyothi Labs since 193 201 Bands.

On BSE, the stock . ended on The 200 each had lost 0.47% on October 11. The stock touched an intraday high of Rs. 205.55 each, close to 52-week high 208 each.

At the current closing price, the company has a Market hat cap 7,344.17 crore. In addition, its Dividend The yield at this price is 1.25%.

Analysts at HDFC Securities said in a report, “Despite the poor performance in the recent past, the company will achieve double-digit revenue growth in the medium term, we believe, given its various relevant strategic initiatives in the recent past.” Looking at it. Its core portfolio is growing. All its major brands have gained 70-400 bps market share in the last few quarters.”

The stock brokerage highlights that by (1) hiring senior sales staff, (2) adopting Sales Force Automation (SFA) retailer app to optimize salesman beat, (3) adopting continuous replenishment, Continued to strengthen go-to-market capabilities. System (CRS) to better align primary and secondary sales, and (4) add 500+ sub-stockists and improve van coverage in rural markets.

After becoming net-debt-free for the first time in fiscal 2011, the note noted that Jyothi Labs guided for higher dividend payouts and is open to opportunities for inorganic growth.

For the financial year 2012, the company paid dividend 2.5 per share to its investors. The total dividend percentage stood at 250 percent. As on March 31, 2022, the company has cash reserves 85 crores.

In addition, the analyst note said, “As a part of its renewed strategy, the company is focused on driving volume to achieve scale and operating leverage, which will result in double-digit revenue growth in commodity prices.” Sharp inflation has led to a decline in gross margins to a record low in Q1FY23. However, with the recent correction in commodity prices, we expect recovery margins from H2FY23. Going forward, we expect the company to see 11%/- Will report Revenue / EBITDA / PAT CAGR of 23% and 28%.

According to an HDFC Securities analyst note, Jyothi Labs’ current discount to peers is largely due to its smaller business size, lower profitability and return ratios than them, and lack of geographic and product diversification. It has a greater presence in the South and is more dependent on soaps and detergents and Ujala Fabric Whitener).

However, with growth prospects over the next two years led by innovation, initiatives, large investments in brands and improved profitability, HDFC Securities noted, “We expect discounts to peers to be lower.”

“We believe that JLL will be gradually re-rated in line with other mid-sized FMCG players as the road eases with its topline and bottomline growth strengthening,” the note said.

Thus, on valuation, the analyst said, “We think the stock’s base case is fair value. 214 (30x FY24E EPS) and the bull case is reasonably priced 228 (32x FY24E EPS). Investors can buy into the stock Add more on band 193-201 (27.5x FY24E EPS) and dips 174-182 (25x Sep’23e eps).”

Year-over-year, shares of Jyothi Labs have climbed nearly 44%. compared to its 52-week low 130 views as on February 25, 2022, shares on Dalal Street are up by almost 54% so far.

Jyothi Labs currently has six power brands namely UJALA, Maxo, Exo, Prill, Margo and Henko. Through UJALA, JLL has become the undisputed market leader in the fabric whitener category. Additionally, the company commands a strong market share in the household insecticides and dishwashing categories.

Disclaimer: The views and recommendations given above are those of individual analysts or broking companies and not of Mint.