Jyothy Laboratories Ltd (JLL) is one of the fastest growing FMCG players in the household care segment with a diverse product portfolio, spread across segments like - fabric whiteners & stiffeners, mosquito repellants, laundry detergents, dishwash products and incense sticks. JLL continues to dominate the fabric whiteners segment with its flagship brand Ujala Supreme (72% market share) and has also garnered a strong market share in new categories like mosquito repellants (Maxo 21%) and dishwash products (Exo 20%).
JLL has recently entered into organized the laundry services business which is operated from its 75% owned subsidiary, Jyothy Fabricare Services Ltd (JFSL). Catering on three levels – retail, institutional and door-to-door, JFSL has acquired 55 institutional clients and a retail chain, Snoways. JLL expects this business to breakeven in FY11 and achieve gross margins of ~35-40% in FY12. The management targets to open 500 Fabric Spa outlets across India and generate Rs5bn revenues with PAT of Rs1bn in FY15.
Well diversified product portfolio
JLL continues to dominate the fabric whitener category with ~72% market share in its key brand, Ujala. Using strong brand equity of Ujala, JLL has successfully expanded it in categories like fabric detergents and fabric stiffener. For reducing its dependence on the Ujala brand, it has diversified into segments like utensil cleaners (Exo), mosquito repellents (Maxo), toilet soaps (Jeeva) and incense sticks (Maya).
JLL has also forayed into organized laundry services business through its subsidiary ‘Jyothy Fabricare Services Ltd’ (JFSL). JFSL has acquired Snoways chain of laundry business in Bangalore and set up its own Collection & Delivery Centers (CDCs) called Fabric Spa. JFSL offers premium services under the Fabric Spa brand and economy services under both the Snoways and Fabric Spa brands. Initial response to this business has been encouraging and the management is optimistic of achieving breakeven in FY11.
Valuation summary (Standalone)
Y/e 31 Mar (Rs m)
|
F6/06
|
F6/07
|
F6/08
|
FY09@
|
H1 FY10
|
Revenues
|
2,993
|
3,596
|
3,721
|
3,500
|
2,487
|
yoy growth (%)
|
13.9
|
20.2
|
3.5
|
-
|
-
|
Operating profit
|
457
|
539
|
629
|
500
|
450
|
OPM (%)
|
15.3
|
15.0
|
16.9
|
14.3
|
18.1
|
Pre-exceptional PAT
|
435
|
489
|
461
|
401
|
361
|
Reported PAT
|
400
|
516
|
524
|
401
|
361
|
yoy growth (%)
|
85.7
|
29.0
|
1.5
|
-
|
-
|
|
|
|
|
|
|
EPS (Rs)
|
6.0
|
6.7
|
6.3
|
7.4*
|
9.9*
|
P/E (x)
|
27.9
|
24.9
|
26.4
|
22.7
|
16.8
|
Price/Book (x)
|
4.8
|
4.1
|
3.7
|
3.4
|
-
|
EV/EBITDA (x)
|
23.8
|
21.1
|
17.8
|
16.7*
|
-
|
Debt/Equity (x)
|
0.0
|
0.0
|
0.0
|
0.0
|
-
|
RoE (%)
|
18.3
|
17.9
|
14.8
|
11.8
|
-
|
RoCE (%)
|
21.8
|
20.2
|
19.9
|
14.5
|
-
|
Source: Company, India Infoline Research
@ 9months, Year end changed from June to March * annualized