Jyothy Labs (532926) Q4 16/17 earnings summary

Executive summary

• FY2016-17 sales growth of 5.4% was achieved amid FMCG slowdown, competition, below-par monsoons and demonetisation; Power Brand sales rose 4.4%.

• Q4 revenue rose 17% from the lower Q3 base as demand normalised; smaller SKUs and tighter dealer inventory helped maintain consumer loyalty.

• Six Power Brands generated 86.4% of sales; growth was supported by product launches, pricing and volume gains, and cost controls.

Financial highlights

• Consolidated revenue from operations was ₹1,749.2 crore, up 5.4% YoY; consolidated PAT was ₹204.2 crore versus ₹73.8 crore, up 176.6%.

• Consolidated PBT rose 24.8% to ₹178.7 crore; basic EPS was ₹11.24 versus ₹4.08, while diluted EPS was ₹11.24 versus ₹4.02.

• Operating EBITDA was ₹256.9 crore versus ₹238.3 crore, up 7.8%; EBITDA margin was 14.7% versus 14.4%.

• Gross margin declined 50 bps to 45.0%; operating margin increased 30 bps to 14.7%.

• Standalone revenue from operations was ₹1,698.2 crore, up 5.6%; PAT was ₹202.1 crore versus ₹74.5 crore, up 171.1%.

Outlook and guidance

• FY2017-18 revenue growth target: 12%, supported by expected GST benefits, good monsoons and higher rural spending.

• EBITDA margin expected to be sustained at ~15%; the full contribution from Assam facilities was expected in FY2017-18.

• Rural coverage target: 25% by FY2017-18; planned initiatives included more SKUs, distribution resources and stronger presence across price points.

• Plans included extending Ujala Crisp & Shine, relaunching Margo, expanding laundry outlets and using SAP S/4 HANA analytics for forecasting and business intelligence.