Jyothy Laboratories reported strong set of numbers for the quarter significantly ahead of consensus estimates. Company reported strong revenue (net of excise duty) growth of 15.8% yoy to Rs516.8cr, 4% ahead of estimates. Company surprised positively on the operating front, as the EBITDA has jumped by 45.8% yoy to Rs88.4cr, 16% ahead of the estimates. EBITDA margin expanded by 352bps yoy to 17.1% against estimate of 15.4%. Led by strong operating performance and other income (of Rs40.8cr), PBT jumped by 140.1% yoy. Further, due to tax reversal of Rs65.6cr in the base quarter, company’s reported PAT has declined by 29.3% to Rs75.9cr (58% ahead of the consensus estimate).
The comparable revenue growth for the quarter stood at 17.2% yoy aided by 11.4% yoy volume growth.
Dishwashing segment reported 18.3% yoy growth (comparable growth of 21.3% yoy) in revenue and 751bps yoy expansion in the EBIT margin.
Fabric care’s revenue grew by 6.7% yoy (13.6% yoy comparable growth) with EBIT margin expansion of 874bps yoy.
Personal care reported revenue growth of 48.5% yoy (comparable growth of 56.2% yoy). However, the segment reported EBIT decline of 47.2% yoy.
Overall the revenue growth from the six power brands stood at 18.5% yoy (GST comparable growth).
Post the revision in GST rates, company has passed on the benefits to the customers in the tune of 6-10% across categories.
Company’s gross margin has improved by 666bps yoy.
Company continued to invest behind brand building, and hence, increased the advertisement expense by 411bps yoy to 10.4%.
Company has reported other income of Rs40.8cr against Rs2.1cr in Q4FY17.
For the base quarter, Q4FY17, company has adjusted tax losses of Rs65.6cr on account of approval of merger of Jyothy Consumer Products Marketing with Jyothy Laboratories. This has led to tax reversal, and hence, the reported PAT is lower by 29.3% yoy.
Comapny indicated that the brand building exercise and product innovation would continue going forward. It shared category wise growth strategy - (a) Post wash - market expansion through extending its dominant position, (b) Laundry - innovations, (c) dish wash - gain market share through leveraging the two key brands, Exo and Pril, (d) household insecticide - innovations and distribution expansion and (e) personal care - relaunch of Margo and relevant extention in the existing barnds.
Company has recommended a dividend of Rs0.5 per equity share for FY18. It also recommended 1:1 bonus shares to the shareholders.
Jyothy Laboratories Ltd is currently trading at Rs. 390, up by 16.8 points or 4.5% from its previous closing of Rs. 373.20 on the BSE.
The scrip opened at Rs. 373.25 and has touched a high and low of Rs. 397.65 and Rs. 365.10 respectively. So far 4,06,821 (NSE+BSE) shares were traded on the counter. The stock is currently trading below its 200 DMA.
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