Jyothy Laboratories - 4QFY2012 Result Update - Angel Broking

Jyothy Laboratories Ltd.'s (JLL) standalone results came in better than our expectations during 4QFY2012. On the revenue front, it reported 37.5% yoy growth to Rs.219cr, with operating profit margin improving by 614bp yoy to 16.6%. Raw-material cost as a percentage of net sales increased sharply during the quarter; however, lower employee cost offset the same and helped the margin to sustain its level. Profit for the quarter grew by 25.7% yoy to Rs.28cr. We maintain our Buy recommendation on JLL.

Henkel's 4QFY2012 performance: Henkel India (HIL) reported a healthy 30.8% qoq growth in net sales at Rs.101cr and operating margin of 4.4%, an improvement of 130bp on qoq basis. However, the bottomline was still in negative zone with a loss of Rs.8cr.

Outlook and valuation

We expect JLL's consolidated revenue to post a CAGR of 31.0% to Rs.1,568cr with an operating margin of 11.1% and profit to post a CAGR of 40.2% to Rs.88cr over FY2012-14E. We maintain Buy on JLL with an SOTP target price of Rs.268.

Source : Equity Bulls

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