Buy Jyothy Labs, target price Rs 245: Geojit

Geojit has buy call on Jyothy Labs with a target price of Rs 245. The current market price of Jyothy Labs is Rs 203.7. Time period given by analyst is a year when Jyothy Labs price can reach defined target.

Jyothy Labs, incorporated in the year 1992, is a Mid Cap company (having a market cap of Rs 7481.88 Crore) operating in FMCG sector.

Jyothy Labs key Products/Revenue Segments include Personal Care and Scrap for the year ending 31-Mar-2022.


Financials
For the quarter ended 31-03-2023, the company has reported a Consolidated Total Income of Rs 622.65 Crore, down -.84 % from last quarter Total Income of Rs 627.93 Crore and up 12.71 % from last year same quarter Total Income of Rs 552.44 Crore. Company has reported net profit after tax of Rs 59.26 Crore in latest quarter.

The company’s top management includes Mr.M P Ramachandran, Mr.R Lakshminarayanan, Ms.M R Jyothy, Ms.M R Deepthi, Mr.Aditya Sapru, Mr.Nilesh Mehta, Ms.Bhumika Batra. Company has B S R & Co. LLP as its auditors. As on 31-03-2023, the company has a total of 37 Crore shares outstanding.

Investment Rationale
The brokerage upgrades the rating to Buy with a target price of Rs. 245, considering healthy topline growth & expanding margins. Input prices have softened from their peak but are still above FY20 levels. The margins are expected to improve on a sequential basis.

The company prioritises volume driven growth by expanding its distribution reach and market share. Direct reach has crossed 1.1mn retail outlets. The brokerage expects revenue/earnings to grow at ~10%/21% CAGR over FY23-25E, respectively, and value the company at 26x FY25 P/E.

Promoter/FII Holdings
Promoters held 62.89 per cent stake in the company as of 31-Mar-2023, while FIIs owned 13.77 per cent, DIIs 16.81 per cent.