Target: ₹412
CMP: ₹340.65
Jyothy Labs Ltd (JLL) is an Indian FMCG player with products across fabric care, dishwashing, mosquito repellents and personal care.
JLL delivered a modest Q1FY26 performance amid a challenging demand environment, with revenue up by 1.4 per cent y-o-y on 3.6 per cent volume growth, while value growth was constrained by higher grammage and promotional pricing.
Gross margin contracted 280 bps y-o-y to 48.5 per cent, due to input cost pressures and heightened competition in the Dish wash segment. EBITDA margin stood at 16.5 per cent, in line with guidance, while PAT declined 4.9 per cent y-o-y to ₹96.8 crore.
Rural momentum is expected to remain strong, supported by favourable monsoon, robust agri output, and higher MSPs while signs of urban recovery is visible as revival are emerging in modern trade and digital channels. A broader recovery anticipated from Q3FY26, aided by festive demand and easing inflation.
Growth will be underpinned by innovation, brand equity, and channel agility, with the company also exploring inorganic opportunities for strategic expansion. JLL’s strong balance sheet and cash flow provide additional support. We value JLL at a P/E of 34x (2yr avg=36x), with a target price of ₹412, and recommend Buy rating supported by rural tailwinds, innovation-led growth, improving urban sentiment and recent stock price correction.