Sunday, October 4, 2020

Jyothy Labs Ltd : On a Debt Free Path


Jyothy Labs Ltd closes   at ₹548.45 with  a  Gain   of  +0.60%   on   01-Oct-2020   with formation of  a  Green Candle    on Daily  Price Chart.
About the Company : Jyothy Laboratories is principally engaged in manufacturing and marketing of fabric care, dishwashing, personal care and household insecticides products. Jyothy Labs Ltd has posted Net Sales / Revenue   of ₹1711.70 Cr & Net Profit of ₹17027 Cr in FY2020 and expected to post Net Sales / Revenue   of ₹1846.75 Cr & Net Profit  of ₹200.40Cr in FY2021.

Strength : 1. Net debt of the company is about Rs. 80 crore and it is around 3-4 months of net cash flows. At the current rate, there is neither any planned capex nor any major investment plan. By the December quarter, Cos. should be debt-free.

2.. Hopeful for a good business performance in the coming quarters.

 

Valuations  : Valuations  :  The Company is now Trading at X 2..50  of its  valuations ( last 4Quaters earnings considered here)at ~150% premium  and at X1.63  of its FY 2021, which is now almost  ~67%  Premium to its value .

Margin of Safety (1Yr Bond Yield: Value>1 ) is now 0.6; any downslide makes it attractive.

Return on Equity (ROE) which is now 13.62  for FY2020 will improve to  16.07% in FY2021 and EPS will improve from 4.64 in FY2020 to 5.46 in FY2021

Disclaimer : We are / may going to take exposure shortly.

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