BQ Prime’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 BQ Prime’s subscribers an opportunity to expand their understanding of companies, sectors and the economy.
ICICI Securities Report
In India, a ‘growth market’, investors tend to (rightly) ignore short-term profit sacrifice, provided the trajectory of volume outperformance / market share gains is clear (as it’s discounted cash flow-accretive).
Jyothy Laboratories Ltd. has gained market shares across most of its categories over last few years. We like the management’s strategy of prioritising market share gains / volume growth over short-term margins which is impacted due to unprecedented input cost pressure.
In terms of categories, the two (larger) segments of dishwashing and fabric care (a multi-brand approach should allay concerns on scalability) have been performing well and present good visibility in the medium term.
We have been highlighting improved volume trajectory in Jyothy Labs– the gross margin weakness is masking improved financial performance.
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