Jyothy Labs Q4 Review - Rising Material Costs Could Affect Margin: Motilal Oswal

Jyothy Laboratories Ltd.’s range of products. (Source: Company website)

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.

Click on the attachment to read the full report:

Motilal Oswal Jyothy Labs Q4FY21 Result Update.pdf


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