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Motilal Oswal Report
Jyothy Laboratories Ltd.'s topline growth in Q4 FY23 was lower than our estimate, due to a weak volume growth of around ~3.3%. For FY23, volume growth stood at ~3%.
Currently, the company's direct reach stands at 1.1 million and the management has underscored its emphasis on broadening reach to drive volume growth.
Gross margins surprised positively by improving 420 basis points YoY and exceeded our expectation by 170 bps. The management highlighted that margins would persist in this range in the near to medium term.
Despite a decent FY23, Jyothy Labs' Ebitda compound annual growth rate for the five years ending in FY24E is expected to remain in single digits.
A topline growth rate of over 15% remains elusive, which is crucial for a company of Jyothy Labs' size (revenues of Rs 24.8 billion in FY23).
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