Sharekhan recommended Hold rating on Jyothy Laboratories with a target price of Rs 180 in its research report dated June 24, 2019.
Management expects 12-14% revenue growth with OPM at 16% due to an expected recovery in H2FY2020. We have factored in 10% revenue growth and ~15% OPM for FY2020 on account of slow recovery in the HI category and higher media spends. Any substantial recovery in business fundamentals (likely to be in H2FY2020) will be a key re-rating trigger for the stock.
Outlook
We maintain our Hold recommendation on Jyothy Laboratories with a revised PT of Rs. 180. HI category will recover but at a gradual space; fabric whitener will grow in mid-single digit; other categories to grow in double digits.
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