Jyothy Labs has a strong focus on distribution and direct reach has increased to 1.2 million from 86,000 in FY21. This, along with new launches, has strongly supported double digit growth in last two years. Jyothy Labs will continue to add the distribution carefully.
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Geojit Report
Rural demand is picking up, aided by robust kharif production along with higher minimum support price while urban demand is expected to gradually improve, supported by pick up in government projects, consumption support from the Union budget and a reduction in food inflation.
Focus on distribution, brand investments, new product launches and low unit pack strategies will support Jyothy Laboratories Ltd.'s volume growth. The company has a strong balance sheet and cash flow generation.
We roll forward to FY27E EPS, and value Jyothy Labs at P/E of 30 times (10 year average=30x) to arrive at a target price of Rs 395, maintain Buy rating considering expected improvement in demand and recent correction in stock price
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