Turning Bullish: Jyothy Labs.

Oct 1, 2024

Jyothy Labs. has turned bullish with strong price momentum seen in short, medium and long term moving averages.
Resistance levels: 572, 595, 640
Support levels: 550, 526, 502
Pros:

• Revenue grows at 8%YoY in Q1FY25 due to volume.
  
• Fabric care and dishwash (77% of total sales) had YoY growth of almost 9% and 7%, respectively. YoY, personal care and household pesticides rose by ~11% and 2%, respectively.
  
• Operating profit increased by 14% YoY, driven by a 340bps spike in gross margin to 51.3%.
  
• Ad spending rose 22% YoY during the quarter.
  
• Yet, EBITDA margin rose 90bps YoY to 18%.
  
• The firm is focusing on volume growth and margin forecast of 16%-17%, not price rises.
  
• Slowly rural demand is rising.
  
• The firm benefits from a good monsoon and GoI demand-boosting measures.
  
• Revenue and profits are projected to expand by ~11%/15% CAGR from FY24-26E.
  
• Valuing JLL at 45x Sept 2026 EPS.
  

Source: REsearch by Geojit Financial Services