Mehabe score: 6 G Factor: 3 Piotski Score: 8 The stock has a rating OBSERVE & HOLD. The mehabe team score is reflective of its fundamental and technical merits. A rating above 8 is considered good buy. The stock has a G-Factor of 3 and Piotski score of 8.
Description
Jyothy Labs Limited was founded in 1983 by Mr. M. P. Ramachandran in Thrissur, Kerala. With a humble beginning as a single-unit, single-product manufacturing company, your Company has grown significantly to become a leading FMCG player with a pan-India presence and several household brands. #
Main Points
Fabric Care Segment (37% of revenues) #
Company dominates the fabric care segment from its flagship brand ‘Ujala’ which is a generic name in its category with a 81% market share. # in fabric whiteners. It also operates its brands Henkomatic and Mr. White in this segment. #Site:JYOTHYLABMain Symbol:JYOTHYLAB
Stock trades at 182.0, above its 50dma 153.12. It also trades above its 200dma 147.01. The stock remains bullish on techicals
The 52 week high is at 171.00 and the 52week low is at 112.20
Price Chart
P/E Chart
Sales and Margin
Strengths
– has reduced debt.
– is almost debt free.
– has been maintaining a healthy dividend payout of 64.01%
Weakness
– The company has delivered a poor sales growth of 3.69% over past five years.
-Promoter holding has decreased over last 3 years: -3.97%
Competition
– The industry trades at a mean P/E of 42.2x. Dabur India trades at the industry’s max P/E of 61.36x. JYOTHYLAB trades at a P/E of 33.4x
– Industry’s mean G-Factor is 4.4 while the mean Piotski score is 8.0. JYOTHYLAB has a G-Factor of 3 and Piotski scoreof 8.
– Average 1 month return for industry is 5.0%. The max 1- month return was given by Jyothy Labs: a return of 14.03 %
Quarterly Results
Sales for period ended Mar 2021 is Rs 499.0 cr compared to Rs 393.0 cr for period ended Mar 2020, a rise of 27.0%
Operating Profits reported at Rs 75.0 cr for period ended Mar 2021 vis-vis 41.0 for period ended Mar 2020 .
Operating Margins expanded 459.7 bps for period ended Mar 2021 vis-vis Mar 2020 .
The EPS for Mar 2021 was Rs 0.8 compared to Rs 1.51 for previous quarter ended Dec 2020 and Rs 0.78 for Mar 2020
Profit & Loss Statement
Profit&Loss Comments
Company reported sales of Rs 1909.0 cr for period ended Mar 2021 vis-vis sales of Rs 1711.0 cr for the period ended Mar 2020, a healthy growth of 10.4%. The 3 year sales cagr stood at 4.5%.
Operating margins expanded to 16.0% for period ended Mar 2021 vis-vis 15.0% for period ended Mar 2020, expansion of 100.0 bps.
Net Profit reported at Rs 199.0 cr for period ended Mar 2021 vis-vis sales of Rs 170.0 cr for the period ended Mar 2020, rising 14.6%.
Company recorded a Net Profit CAGR of 2.3% over the last 3 years
Balance Sheet Statement
Cash Flow Statement
Cash Flow comments
CashFlow from operating activities was positive.
CashFlow from operating activities: Rs 402.0 cr for period ended Mar 2021 vis-vis Rs 171.0 cr for period ended Mar 2020
Sales Growth
Profit Growth Statement
Profit Growth Statement
Stock Price CAGR
Return of Equity
General Comments
– The company has had stable/constant Return on Equity (RoE) metric. The RoE on Last Year basis was 15.0% compared to 15.0% over the last 3 Years. – The stock has given a return of 45% on a 1 Year basis vis-vis a return of -7% over the last 3 Years. – The compounded sales growth on a TTM bassis is 12% vis-vis a compounded sales growth of 5% over the last 3 Years. – The compounded profit growth on a TTM basis is 17% vis-vis a compounded profit growth of 2% over the last 3 Years.
Ratios
Shareholding Pattern
– FII shareholding has remained largely constant. The Mar 2021 fii holding stood at 12.45% vis-vis 12.08% for Dec 2020 – Public shareholding has remained largely constant. The Mar 2021 public holding stood at 7.78% vis-vis 7.88% for Dec 2020
Conclusion
– has reduced debt.
– is almost debt free.
– has been maintaining a healthy dividend payout of 64.01% – The company has delivered a poor sales growth of 3.69% over past five years.
-Promoter holding has decreased over last 3 years: -3.97%
Fundamentally, the stock remains weak on business fundamentals. Weak near term results have dampened and questioned business drivers. We suggest to wait for a upturn in business performance.
Technically, the stock trades above its 50 DMA 153.12 and is trading at 182.0 It has shown near term bullish momentum contrary to business fundamentals. We suggest to observe price action. However as investors, who like to avoid timing the markets, we suggest to avoid the stock
