Stock in Action - Jyothy Labs 22 October 2024

Highlights

1. Jyothy Labs' share price has gained over 9.39% year to date in 2024 including today’s gain.

2. Jyothy Labs' financial performance has increased over the past year with operating profit increasing from ₹316 crores in March 2023 to ₹496 crores till TTM 2024.

3. Jyothy Labs quarterly earnings report highlighted a continuous improvement in net profit in the last 2 quarters.

4. HDFC Securities has given a buy rating to Jyothy Labs with a target price of ₹600. Currently stock is treading at ₹527 per share.

5. Jyothy Labs' share price has seen some profit-taking since August, after reaching a high of ₹600.

6. Jyothy Labs stock has outperformed the market by delivering just 50% returns in the last year.

7. Jyothy Labs is currently trading at ₹527 showing a 2% increase as of 1:00 pm on NSE.

8. Jyothy Labs has a strong Return on Equity (ROE) of 21.2% and a Return on Capital Employed (ROCE) of 27%.

9. Jyothy Labs net profit grew by 5.7% year on year to ₹1,017 million for the quarter ending June 2024 up from ₹963 million in the same quarter last year.

10. As per the September quarter filings the company has a 62.89% promoter holding, 15.26% DII holding and 15.10% foreign institutional investor (FII) holding.

Why is Jyothy Labs Share in News?

At the time of writing Nifty is down 0.50% trading at 24,655 while Nifty Bank is down 0.64% trading at 51,620. Both indices have been hitting lower lows daily indicating a persistent weakness in the market. This continuous decline reflects ongoing bearish sentiment with market participants showing caution due to various global and domestic factors. But the stock of Jyothy Labs treading 2% up from yesterday’s close.

Jyothy Labs Recent Deal

On 20 September the company announced it was acquiring Quiclo, a laundry service brand owned by Smartwash Solutions Private Limited. This acquisition includes Quiclo’s software and customer database helping the company strengthen its presence in the laundry service market.

The deal is valued at ₹70 lakh plus taxes and aims to expand the company’s customer base, especially in Hyderabad which aligns with its core laundry business. Additionally, the company’s laundry service and dry cleaning unit in Hyderabad has started its commercial operations, according to a regulatory filing.

Jyothy Labs Financial

Jyothy Labs reported a 5.7% year on year increase in net profit reaching ₹1,017 million for the quarter ending June 2024 compared to ₹963 million the previous year. During the same period, net sales rose by 8.0% to ₹7,418 million up from ₹6,871 million in April-June 2023.

For the full year ending March 2024, Jyothy Labs saw a 54.0% increase in net profit totaling ₹3,693 million compared to ₹2,397 million in FY23. The company's revenue also grew by 10.9% reaching ₹27,569 million for FY24.

About Jyothy Labs

Jyothy Labs founded in 1983, is a prominent Indian company specializing in consumer goods particularly in home care and personal care products. It is well known for its popular brands, including Ujala, a leading fabric whitener, Maxo, a range of mosquito repellents and Henko, a premium detergent. The company boasts a diverse product range that caters to various consumer needs and has a strong presence in both urban and rural markets across India. Committed to sustainability, Jyothy Labs focuses on eco friendly practices and continually invests in research and development to enhance product quality and innovation. Overall, it has established itself as a trusted name in the Indian consumer goods sector.

Conclusion

Jyothy Labs is demonstrating robust financial performance and resilience in a challenging market, with a year to date share price gain of over 9.39%. The company's strategic acquisition of Quiclo enhances its footprint in the laundry service sector aligning with its core offerings. With impressive growth in net profit and revenue alongside strong return metrics, Jyothy Labs stands out in the consumer goods sector. HDFC Securities' buy rating and target price of ₹600 indicate positive market sentiment, positioning the stock favorably despite broader market declines. Overall, Jyothy Labs remains a key player in India's consumer goods landscape.