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JYOTHY LABORATORIES LIMITED

LONG TERM VALUEPICK
Company profile
Jyothy Laboratories Ltd. (JLL) is a multi-product company
owning brands like Ujala, Maxo, Exo, Jeeva and Maya.
Market data as on June 07, 2010 The company has diversified its operations in area of fabric
BSE 532926 care, household insecticide, incense candles and personal
care. The USP of the Company lies in its ability to
NSE JYOTHYLAB
providing innovative and value for money products. It has
Bloomberg JYL:IN
consciously entered into untapped markets and created
Sector Household Products
niche products.
View Positive
CMP (Rs.) 222.00
Investment rationale
Market Cap (Rs Crores) 1617.00
Free Float (%) 29.87  The Company has leveraged the Ujala brand equity to
52-WeeK High (Rs) 244.70 introduce other fabric care products like Ujala
52-Week Low (Rs) 85.10 Detergent, Ujala Stiff & Shine etc. It is also likely to
BETA 0.48 introduce products like stain removers etc.
P/B (x) 4.15  The Company has 21 manufacturing facilities in 14
Current P/E 23.49 locations in India, of which eight facilities enjoy tax
Face Value (Rs.) 1.00 exemptions
 The Company has tied up with Defence Research &
Development Organization (DRDO) to exclusively
Price performance from July 09 to manufacture and market a multi-repellent which is
expected to be launched by September 2010
Jyothy Laboratories Ltd. Nifty
 The in-house production of packaging and labelling
30.00%
20.00% products result in significant cost savings for the
10.00%
0.00% Company
-10.00%
-20.00%
 The Company recently forayed into service sector
Time Period Stock BSE Sensex through new venture ‘Jyothy Fabricare Services
1 Month 26.35% -2.46% Limited’ to provide world class laundry at affordable
3 Month 22.49% -1.15% price at consumer doorstep
1 Year 135.33% 9.82%
Key risk factor
× Any increase in the crude oil prices will adversely
impact the performance of the Company as it is a big
Shareholding pattern as on 31st March 2010 consumer of High Density Polyethylene (HDPE) for
Promoters 70.13 containers, whose costs are linked to crude oil prices
Pledged NA
FII"s 4.17%
DII's 17.40%
Public 5.64%
Others 2.66%

Analyst view
JLL has a strong consumer franchise and a diversified homecare product portfolio which will help it in successfully
scaling up its operations in long term. JLL’s products with rural focus like Maxo Coils (mosquito repellent not
requiring electricity), Exo Dish wash bars (convenient substitute for ash) etc. gives it added advantage over its
peers. Further, its strong local focus provides it with the ability to launch new products and extensions at the local
level in short time.

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JYOTHY LABORATORIES LIMITED

Industry outlook
The large share of fast moving consumer goods (FMCG) in total individual spending along with the large population
base makes India one of the largest FMCG markets. The Indian FMCG sector is the fourth largest sector in the
economy with a total market size in excess of USD 14.7 billion. The FMCG market is set to double from USD 14.7
billion in 2008-09 to USD 30 billion in 2012.
FMCG Industry is characterized by a well established distribution system, low penetration levels, low operating cost,
low per capita consumption and intense competition between organized and unorganized segments. Availability of
key raw materials, cheaper labor costs and presence across the entire value chain gives India a competitive
advantage.
The demographics of rural India are fast changing, with reducing dependence on agriculture, shift towards higher
value added farm activities, increase in minimum support prices of major commodities and benefits of National Rural
Employment Guarantee Scheme (NREGS) and Pradhan Mantri Gram Sadak Yojana (PMGSY)

Recent Developments: Business Divisions:

Jyothy Fabricare Services Ltd. (JFSL): Based on the  Fabric Care
management philosophy of entering untapped markets,  Ujala Supreme
JLL has announced their venture into laundry care
 Ujala Washing Powder
services.
 Stiff & Shine
JFS L
 Household Insecticide
 Maxo A Grade Coils

 Maxo Aerosol

 Maxo A Grade Liquids

Institution Economy Premium
al  Utensil Cleaners
 Exo Dish Wash Bar

 Exo Dish Wash Liquid

Hotels, Door-to- High-  Exo Safai

Airlines, Door Income
 Fragrances
Restauran Group
 Maya

 Personal Care
Low Low High
Margins Margins Margins  Jeeva Naturals

 Fabric Care Services

 The sales mix between institutional and retail is

expected to be in the range of 80:20 over the next
few years
 The Company has acquired 8 stores of ‘Snoways’ in
Bangalore in September 2008 and has added 21
retail outlets, taking the total no. of stores to 29
 JFSL is already servicing around 16000 garments a
day
 Depending on the success of the Bangalore
venture, the Company will expand into Chennai,
Hyderabad and Pune markets

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JYOTHY LABORATORIES LIMITED

Segmental revenue Revenue-wise breakup of Sales for FY10E

 Exo dish wash bars and Maxo liquid are likely
Ujala
to be the growth drivers in FY11 as these
products gain scale due to their national launch Maxo
4%3% 2%
 During FY09, the Company launched Ujala 19% 39% Exo
detergent in neighboring southern states Tamil
Maya
Nadu & Andra Pradesh
 The Company plans to launch nationally Ujala Fabric
33% Spa
detergent in FY11 Jeeva

Financial analysis Exhibit: Financial - Annual Figures in Crores

 During FY09, the Company decided to change Particulars Jun-07 Jun-08 Mar-09* Mar-10
its accounting year end from June 30th to Net Sales 359.44 376.24 362.62 597.31
March 31st Growth (%) 19.05% 4.67% NA NA
EBIDTA 54.11 60.98 49.48 92.81
 The profitability of the Company has remained
EBIDTA Margin (%) 15.05% 16.21% 13.65% 15.54%
more or less stable over the last three years as EBIT 47.52 53.00 42.00 80.44
exhibited by the trend in EBITDA margin, EBIT EBIT Margin (%) 13.22% 14.09% 11.58% 13.47%
margin and net profit margin Net Profit 51.41 49.85 38.38 68.60
 Raw material cost as a percentage of sales Growth (%) 30.65% -3.03% NA NA
decreased from 52.64% in FY07 to 50.28% in Net Profit Margin (%) 13.96% 12.98% 10.36% 11.27%
EPS** 7.08 6.87 5.29 9.45
FY08, which led to a improvement in EBITDA
BVPS** 40.30 44.83 47.81 53.48
margin from 15.05% in FY07 to 16.21% in FY08
ROE (%) 18.82% 16.13% 11.41% 18.66%
 The current ratio of the Company has improved ROCE (%) 17.05% 14.15% 10.16% 15.17%
over the last four years signal a more efficient ROA(%) 18.50% 15.93% 11.25% 18.09%
utilization of resources during the period Current Ratio 3.97 3.19 3.16 2.42
Operating Cash Flow Growth -42.22% 99.32% NA NA
 ROE dipped from 18.82% in FY07 to 11.41% in Source: Company Annual Report
FY09 on account of the Company’s loss-making NA: Not Applicable
Home care business * Mar-09 figures are for 9 months

 The Company is virtually debt-free and has **EPS & BVPS have been adjusted for
stock-split
about in cash reserves Rs. 122.72cr.
 During FY10, the fabric care sector grew by
15%, household insecticide by 37% and surface
Exhibit: Financial – Quarter Figures in Crores
cleaning saw an upsurge of 99%
Particulars Jun-09 Sep-09 Dec-09 Mar-10
 To counter the rise in HDPE prices, the Company Sales Growth (YoY) 21.05 48.3 12.92 34.78
may increase the price per bottle Net Profit Growth (YoY) 21.91 176.67 25 25.92
 FY11 topline growth drivers will be the DRDO EBITDA Margin (%) 24.25 12.83 13.8 18.69
product launch and nationwide launch of Ujala Net Profit Margin (%) 18.42 10.86 12.46 13.87
detergent, Exo dish wash bars and Maxo liquid EPS 3.03 1.94 2.32 3.74
Source: Company Interim Report

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JYOTHY LABORATORIES LIMITED

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