Buy Jyothy Labs, target price Rs 190: ICICI Securities

Buy Jyothy Labs, target price Rs 190:  ICICI Securities

ICICI Securities has buy call on Jyothy Labs with a target price of Rs 190. The current market price of Jyothy Labs Ltd. is Rs 156.85.

Jyothy Labs Ltd., incorporated in the year 1992, is a Mid Cap company (having a market cap of Rs 5724.78 Crore) operating in FMCG sector.

For the quarter ended 31-12-2020, the company has reported a Consolidated sales of Rs 476.62 Crore, down -5.52 % from last quarter Sales of Rs 504.49 Crore and up 13.27 % from last year same quarter Sales of Rs 420.79 Crore Company has reported net profit after tax of Rs 53.23 Crore in latest quarter.

Investment Rationale
The brokerage increases earnings estimates by ~5%; modelling revenue / EBITDA / PAT CAGR of 11 / 16 / 21 (%) over FY20-23E. Upgrade to BUY (from Add) with DCF-based revised target price of Rs190 (was Rs180). At target price, the stock will trade at 23x P/E multiple Mar-23E. Key downside risks are significant competition in hygiene related categories and input price inflation impacting margins.

Promoter/FII Holdings
Promoters held 62.9 per cent stake in the company as of Dec 30, 2020, while FIIs held 12.5 per cent, DIIs 16.7 per cent and public and others 7.9 per cent.

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