Jyothy Labs Q4 Review - Rising Material Costs Could Affect Margin: Motilal Oswal
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Motilal Oswal Report
Jyothy Laboratories Ltd. delivered a miss on all fronts in its Q4 FY21 result.
Even if one adjusts for the sales impact of ~8% YoY on account of common reporting standards implementation (shared during the conference call), average growth in the last two-years remains weak (in mid-single digits).
While there has been improvement in net working capital days and the company is now net debt free, topline growth is key for a company with sales of only Rs 19 billion.
The likelihood of 15% sales growth continues to appear difficult.
Sales growth compound annual growth rate has been 3.7% in the preceding five years.
With margin likely to under pressure due to material cost increase, earnings growth prospects remain weak.
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