Jyothy Labs Q2 Results Review - Superior Execution Trumps Unconducive Macros: ICICI Securities

ICICI Securities Report

We reckon, Jyothy Laboratories Ltd. stock will continue to rerate as it reaps the gains of focused strategy and improved execution under Ms Jyothy's leadership. Distribution-led volume gains are integral to the thesis. Q2 FY24 results stay good and improving –

1. plus 11% revenue growth YoY (plus 9% YoY volume growth),

2. operating margins improving to all-time high of 18.5%, and

3. focus on laying (medium term) building blocks – rural and low unit pack focus along with distribution expansion.

The good performance was broad-based led by personal care (led by core and innovations) and fabric care (led by mass brands).

Dishwashing also had a good quarter while HI continues to underperform due to category issues.

Jyothy Labs continues to gain market shares across most of its categories over last few years. We like management’s strategy of prioritising market share gains / volume growth. Jyothy Labs remains top pick in consumer Staples. 'Buy' retained.

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