BQ Blue’s special research section collates quality and in-depth equity and economy research reports from across India’s top brokerages, asset managers and research agencies. These reports offer BloombergQuint’s subscribers an opportunity to expand their understanding of companies, sectors and the economy.
Motilal Oswal Report
Jyothy Laboratories Ltd.'s sales came in above our expectation in Q2 FY22.
Gross/Ebitda margin was significantly lower than our estimate due to a greater material cost impact and higher-than-anticipated ad spends.
No respite is expected in material cost inflation, affecting performance in subsequent quarters as well.
Topline growth is key for a company with sales of just Rs 19 billion. The likelihood of consistent 15% sales growth (essential for any re-rating) continues to appear difficult.
Sales compound annual growth rate has been 3.7% for the preceding five years.
With margin likely to remain under pressure due to material cost increases, Jyothy Labs' earnings growth prospects remain weak.
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