Jyothy Labs Q3 Results Review - Margins Surprise; Sales Growth Visibility Unclear: Motilal Oswal

Motilal Oswal Report

Jyothy Laboratories Ltd.’s standalone net sales rose 13.2% YoY to Rs 5,986 million (our estimate: Rs 5,762 million).

Ebitda grew 39.5% YoY to Rs 844 million (our estimate of Rs 703 million). Profit before tax increased 86.9% YoY to Rs 785 million (our estimate: Rs 596 million) on account of lower depreciation at Rs 106 million versus Rs 210 million in Q3 FY22.

Adjusted profit after tax grew 74.2% YoY to Rs 617 million (our estimate: Rs 495 million).

Gross margin expanded ~100 bps YoY to 42.1%. Ebitda margin expanded ~270 bps YoY to 14.1%.

For nine months-FY23, sales/Ebitda/adjusted profit after tax grew 12.4%/16.5%/42.3% YoY to Rs 18,308 million/Rs 2,244 million/Rs 1,674 million.

Fabric care/dishwashing/ household insecticides/personal care grew 26.0%/10%/(15.6%)/11.6% YoY to Rs 2,635 million /Rs 2,213 million /Rs 434 million /Rs 591 million in Q3 FY23.

Despite good results so far in FY23 (albeit on a low margin base in FY22), Jyothy Lab’s Ebitda compound annual growth rate for the three years and five years ending in FY23E is expected to remain in single digits.

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