Jyothy Laboratories
Mumbai based FMCG company, found in 1983.
PRODUCT MIX:
Fabric Care. Home Care. Personal Care. Dish Wash
Under fabric care brands: ujala, henko, mr white, more light
Home care brands: maxo, t shine, maya
Personal care brands: margo, neem active, FA
Dish wash brands: exo, pril
They have 27 manufacturing plants in 23 locations.
Jyothy Labs is engaged in manufacturing and marketing of fabric care, home care personal care and dish wash.
Stock P/E at 31,lesser than its competitors.
Promoter holding has been reduced wrt to sept 2019(67.11) and constant henceforth of (62.89). Might be a negative, but DII’S have constantly increased holdings to 17.15 percent. ROCE at 14% as on mar 2020, but ROCE at 17% when compared to 2018 at 15%.
ROE has been on an average of 13 to 14 % in the 10 yr, 5 yr , 3 yr range.
Now I feel this is a good stock to invest in, because it is a small to mid cap stock of 5892 crores. The stock now is moving over the 50 day and 200 day moving average. Company is almost debt free, and has a dividend payout as on march 2020 is 65%.
Number one in fabric care( Ujala supreme) with ariel being main competitor.
Goes hand in hand with the governments, make in india project, made in india made for india.
Majority of the portfolio are essential and hygiene products which are in high demand post covid 19. 81.7% dividend payout in FY2019-20. Debt to equity is 0.21, which is a very good symbol for the company. 85% of their products are manufactured in their own industries providing employment in rural areas. With increase in rural infrastructure development, increase in usage of these products will boost sales and revenue.
No pledged promoter holding.
SALES OF KEY SEGMENTS:
1) Fabric care- 708 crores
2) dishwashing- 567 crores
3) household insecticides- 181 crore
4) personal care- 180 crore
5) laundry services- 41 crore
6) others- 34 crores
FMCG’S growth oppurtunity have brought in many foreign big players into the market, which I feel jyothy labs might not be able to sustain. Innovative and new brands entering india, jyothy labs might be on choke in urban areas. Rural areas, Jyothy labs might have a good hold.
To be on a safer side, one can start accumulating once NIFTYFMCG reaches 33073. According to me Jyothy Labs has support at 151.40-151 and 136, 129-128. These levels have been mentioned if someone wants to enter for long term basis. As 136 and 128 are mid- low levels of stock, if compared with the current price.
-SHIVAM M DAVE
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