Professional Documents
Culture Documents
19thJanuary, 2018
Company Data
Growth sustains... Market Cap (cr) Rs. 6,788
Jyothy Laboratories Ltd (JLL) is an Indian FMCG player with products Enterprise Value (cr) Rs. 7,395
across Fabric care, Dishwashing, Mosquito repellents & Personal Care.
Outstanding Shares (cr) 18.2
Q3FY18 revenue growth was healthy at 15.9% YoY supported by 11.5%
Free Float 33%
YoY growth in volumes.
Dividend Yield 1.6%
Revenue growth was led by strong YoY growth in Fabric care(17.9%),
Dish washing(18.9%) and Personal care(37.9%) while insecticide segment 52 week high Rs. 441
declined by 17.1% due to disruption in wholesale impacted coil business. 52 week low Rs. 325
EBITDA margins expanded by 240bps YoY to 16.1% largely supported by 6m average volume (cr) 0.02
increase in gross margins (130bps YoY) and PAT grew 59.3% YoY. Beta 0.69
JLL had passed the benefit of reduction in GST rates to consumers which Face value Rs1
improved the demand. Shareholding (%) Q1FY17 Q2FY18 Q3FY18
We expect a healthy revenue growth of 12% CAGR over FY18-20E as rural Promoters 66.9 66.9 66.9
demand looks better. We recommend Accumulate rating with a revised FII’s 14.0 14.7 15.18
target price of Rs.417 at 22.5x on FY20E EV/EBITDA.
MFs/Insti 5.8 5.3 11.45
Demand improves as GST headwinds over Public 13.3 13.1 6.52
Q3FY18 revenue on GST comparable basis grew by 15.9%YoY, and earnings grew Total 100.0 100.0 100.0
by 59% YoY. Revenue growth was led by strong YoY growth in Fabric care
(17.9%), Dish wasing (18.9%) and Personal care (37.9%) while insecticide segment Price Performance 3month 6month 1 Year
declined by 17.1% YoY due to disruption in wholesale channel impacted coil Absolute Return -3.3% -2.2% 7.8%
business and early onset of winters. JLL had passed on the benefit of GST rate cut 8.9% 10.1% 29.4%
Absolute Sensex
w.e.f 15th Nov to consumers which along with other offers across brands by the
Relative Return* -12.2% -12.3% -21.6%
company led to demand improvement. As per management demand is coming
*over or under performance to benchmark index
back to normal after GST related disruption. We expect a revival in consumer
500 Series1 Series2
sentiments supported by rural demand coupled with products gaining traction
450
into newer geographies to drive revenue momentum. Considering JLL’s
400
consistent innovation & brand building agenda backed by strong investment in
350
media (A&P to sales ratio at 7.5% Vs 7.0% YoY) we factor 12%CAGR in revenue
300
over FY18-20E.
250
Management maintains FY18 margins at 15%... Jan 17 Apr 17 Jul 17 Oct 17 Jan 18
EBITDA margins expanded to 16.1% from 13.7% YoY (GST adjusted) largely
supported improvement in gross margins (130bps). Management has maintained Consolidated (Rs.cr) FY18E FY19E FY20E
its guidance for FY18 margin at 15% (YTD EBITDA margins at 14.6%) and does Sales 1731 1952 2183
not see surge in crude to impact gross margins in the next quarter due to adequate Growth (%) 2.8 12.8 11.9
inventory. While we modify upward our EBITDA margins for FY18, we have EBITDA 255 301 343
marginally tweaked down our margin assumption for FY19 from 16% earlier to 14.7 15.4 15.7
Margin(%)
15.4%. GST is expected to structurally change the supply chain and bring
PAT Adj 166 195 233
efficiencies going forward. Factoring healthy revenue growth and operating
efficiencies we expect EBITDA margins to improve 102bps over FY18-20E. Growth (%) -19.7 17.4 19.7
Adj.EPS 9.1 10.7 12.8
Product launches and expansion...
JLL has been focusing on expanding its product pipeline across the country. Growth (%) -19.7 17.4 19.7
Recently JLL announced its plan for a series of new launches in the ayurveda P/E 41.2 35.1 29.3
space targeting to more than doubling its revenues from personal care space by P/B 6.1 5.7 5.3
2021. Also, new products within the key categories will help gain market share. EV/EBITDA 28.4 23.6 20.3
We expect Fabric care and Dishwashing will continue to be the key growth 15.1 16.9 18.8
RoE (%)
segments which would see gaining market share in the coming years.
D/E 0.4 0.3 0.2
Valuations
We expect healthy growth in revenue across the segments as GST led headwinds
recede and strong revival in rural demand. We recommend Accumulate rating Vincent Andrews
Analyst
with a revised target price of Rs.417 at 22.5x on FY20E EV/EBITDA.
Financials (Consolidated)
Profit & Loss Account
(Rscr) Q3FY18# Q3FY17* YoY Growth % Q2FY18# QoQ Growth %
Revenue 431.2 383.9 12.3% 429.9 0.3%
EBITDA 69.3 50.86 36.3% 70.9 -2.3%
Margin (%) 16.1 13.2% 290bps 16.5 (40bps)
Depreciation 7.8 7.34 6.3% 7.4 5.4%
EBIT 61.5 43.52 41.3% 63.5 -3.1%
Interest 12.03 14.44 -16.7% 11.9 1.1%
Other Income 2.27 2.57 -11.7% 3.9 -41.8%
Exceptional Items - 0.19 -
PBT 51.74 31.46 64.5% 55.5 -6.8%
Tax 18.82 10.79 74.4% 9.8 92.0%
Reported PAT 32.92 20.67 68.0% 45.7 -24.0%
Adjustment - 1.9 -
Adj PAT 32.92 20.86 57.8% 45.7 -28.0%
No. of shares (cr) 18.2 18.2 0.0% 18.2 0.0%
EPS (Rs) 1.9 1.2 58.3% 2.5 -24.0%
Change in estimates
Old estimates New estimates Change %
Ratios
Cash flow
Y.E March FY16A FY17A FY18E FY19E FY20E
FY16A FY17A FY18E FY19E FY20E Profitab. & Return
Y.E March (Rscr)
EBITDA margin (%) 15.0 15.26 14.7 15.43 15.72
Net inc. + Depn. 105 234 195 223 262
EBIT margin (%) 13.0 13.5 13.1 14.0 14.4
Non-cash adj. 84 -5 29 30 23
Net profit mgn.(%) 5.7 12.3 9.6 10.0 10.7
Changes in W.C 3 -66 -334 -26 -19
C.F.O 192 163 -110 226 266 ROE (%) 9.6 20.8 15.1 16.9 18.8
Capital exp. -26 -57 -11 -5 -5 ROCE (%) 11.4 20.3 12.9 14.7 16.5
Change in inv. 118 60 0 0 0 W.C & Liquidity
Other invest.CF 4 7 11 11 12 Receivables (days) 17.4 23.5 26.9 25.9 25.1
C.F - investing 108 -17 0 6 7 Inventory (days) 42.8 41.4 42.6 41.3 40.5
Issue of equity 0 49 0 0 0 Payables (days) 128.6 154.7 108.4 72.4 70.4
Issue/repay debt -117 -2 361 -50 -50 Current ratio (x) 0.8 1.1 2.1 2.1 2.1
Dividends paid -174 -22 -127 -127 -127 Quick ratio (x) 0.2 0.2 0.9 0.9 0.9
Other finance.CF -10 -130 -42 -41 -36
Turnover &Levg.
C.F - Financing -302 -104 193 -218 -213
Gross asset T.O (x) 5.4 5.1 4.8 5.3 5.8
Chg. in cash -2 42 82 15 61
Closing cash 73 103 185 200 260 Total asset T.O (x) 0.9 0.9 0.9 1.0 1.1
Int. covge. ratio (x) 3.3 4.0 5.4 6.7 8.8
Adj. debt/equity (x) 0.0 0.5 0.4 0.3 0.2
Valuation ratios
EV/Sales (x) 4.5 4.4 4.2 3.6 3.2
EV/EBITDA (x) 30.2 28.7 28.4 23.6 20.3
P/E (x) 75.8 33.1 41.2 35.1 29.3
P/BV (x) 7.6 6.3 6.1 5.7 5.3
Recommendation Summary (last 3 years) Dates Rating Target
24th October 2013 Hold 202
500
28th January2014 Accumulate 226
26th May 2014 Reduce 187
400 01st June 2015 Accumulate 314
04th August 2015 Hold 325
300 23rd October 2015 Accumulate 341
2nd February 2016 Accumulate 328
200 1st November 2016 Reduce 315
24th May 2017 Hold 394
100 17th November 2017 Buy 388
19th January 2018 Accumulate 417
0
Jan-13 Jul-13 Jan-14 Jul-14 Jan-15 Jul-15 Jan-16 Jul-16 Jan-17 Jul-17 Jan-18
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VINCENT K A
DN: c=IN, o=GEOJIT FINANCIAL SERVICES LTD,
postalCode=682024, st=Kerala,
2.5.4.20=6ae30d083d523630c71071368f2205dd22201d69f33
2e9d96db4686de0cf567b, cn=VINCENT K A
Date: 2018.01.19 12:29:21 +05'30'
Geojit Financial Services Ltd. (formerly known as Geojit BNP Paribas Financial Services Ltd.), Registered Office: 34/659-P, Civil Line Road, Padivattom,
Kochi-682024, Kerala, India. Phone: +91 484-2901000, Fax: +91 484-2979695, Website: geojit.com. For investor queries: customercare@geojit.com, For
grievances: grievances@geojit.com, For compliance officer: compliance@geojit.com.
Corporate Identity Number: L67120KL1994PLC008403, SEBI Regn.Nos.: NSE: INB/INF/INE231337230 I BSE:INB011337236 & INF011337237 | MSEI:
INE261337230, INB261337233 & INF261337233, Research Entity SEBI Reg No: INH200000345, Investment Adviser SEBI Reg No: INA200002817, Portfolio
Manager:INP000003203, NSDL: IN-DP-NSDL-24-97, CDSL: IN-DP-CDSL-648-2012, ARN Regn.Nos:0098, IRDA Corporate Agent (Composite) No.: CA0226.
Research Entity SEBI Registration Number: INH200000345