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D i s a p p o i n t m e n t o n a l l f r o n t s …
Jyothy Laboratories Ltd’s (JLL) Q4FY11 results were subdued across all
its categories. JLL’s consolidated sales for Q4FY11 declined ~18% YoY to
| 174.9 crore from | 200.6 crore in Q4FY10. The company’s margins also
dipped significantly by ~840 bps to 4.9% from 13.3% in Q4FY10 on the
back of higher other operating and employee expenses, which rose ~740
bps (21.1% of sales) and ~380 bps (14.7% of sales). Lower revenues
along with significantly strained margins pulled down the PAT from | 32.5
crore in Q4FY10 to | 7.6 crore in Q4FY11, a dip of ~77%.
ƒ Operational highlights
JLL’s sales from all its flagship brands Ujala, Maxo and Exo declined by
~4%, ~36% and ~16% to | 71.3 crore, | 72.6 crore and | 28 crore,
respectively. The sales from its laundry services business stood at | 9.4
crore (FY11), considerably lower than our expectation.
ƒ Business highlights
During Q4FY11, JLL successfully completed acquisition of a 65.9% stake
in Henkel India Ltd for | 677.5 crore. The company has also made an open
offer to acquire a further 20% of equity shares at | 41.2/share. On the
Jyothy Fabricare Services Ltd (JFSL) front, JLL completed the acquisition
of 100% stake in Delhi based Diamond Fabcare Services and Mumbai
based Akash Cleaners for | 16.5 crore and | 19.4 crore, respectively.
V a l u a t i o n
At the CMP, the stock is trading at 35.4x and 22.6x its FY12E and FY13E
EPS of | 5.8 and | 9.1, respectively. We expect JLL’s sales growth to be
back led by revival in growth of Maxo, Exo and JFSL. Also, with passing
on of the higher costs through price increases, we believe that margins
would see an uptrend. However, servicing the huge debt of ~| 600 crore
for Henkel’s acquisition remains a concern as higher interest cost could
cap the earnings growth. We are, therefore, maintaining a cautious view
on the stock valuing it at 22x its FY13E EPS and maintaining our target
price of | 200 with a HOLD rating
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
D i s a p p o i n t m e n t o n a l l f r o n t s …
Jyothy Laboratories Ltd’s (JLL) Q4FY11 results were subdued across all
its categories. JLL’s consolidated sales for Q4FY11 declined ~18% YoY to
| 174.9 crore from | 200.6 crore in Q4FY10. The company’s margins also
dipped significantly by ~840 bps to 4.9% from 13.3% in Q4FY10 on the
back of higher other operating and employee expenses, which rose ~740
bps (21.1% of sales) and ~380 bps (14.7% of sales). Lower revenues
along with significantly strained margins pulled down the PAT from | 32.5
crore in Q4FY10 to | 7.6 crore in Q4FY11, a dip of ~77%.
ƒ Operational highlights
JLL’s sales from all its flagship brands Ujala, Maxo and Exo declined by
~4%, ~36% and ~16% to | 71.3 crore, | 72.6 crore and | 28 crore,
respectively. The sales from its laundry services business stood at | 9.4
crore (FY11), considerably lower than our expectation.
ƒ Business highlights
During Q4FY11, JLL successfully completed acquisition of a 65.9% stake
in Henkel India Ltd for | 677.5 crore. The company has also made an open
offer to acquire a further 20% of equity shares at | 41.2/share. On the
Jyothy Fabricare Services Ltd (JFSL) front, JLL completed the acquisition
of 100% stake in Delhi based Diamond Fabcare Services and Mumbai
based Akash Cleaners for | 16.5 crore and | 19.4 crore, respectively.
V a l u a t i o n
At the CMP, the stock is trading at 35.4x and 22.6x its FY12E and FY13E
EPS of | 5.8 and | 9.1, respectively. We expect JLL’s sales growth to be
back led by revival in growth of Maxo, Exo and JFSL. Also, with passing
on of the higher costs through price increases, we believe that margins
would see an uptrend. However, servicing the huge debt of ~| 600 crore
for Henkel’s acquisition remains a concern as higher interest cost could
cap the earnings growth. We are, therefore, maintaining a cautious view
on the stock valuing it at 22x its FY13E EPS and maintaining our target
price of | 200 with a HOLD rating
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