Jyothy Labs: Geojit sees near 21% upside potential in this FMCG stock; here's why
In its latest report, Geojit noted that Jyothy Labs delivered a modest performance in Q1 FY26, with revenue rising 1.4 per cent year-on-year (YoY) on 3.6 per cent volume growth.
- Aug 22, 2025,
- Updated Aug 22, 2025 5:04 PM IST
Domestic brokerage Geojit has expressed a positive view on Jyothy Labs Ltd, projecting a potential upside of nearly 21 per cent from current levels. The FMCG player, known for brands such as Ujala, Henko, Pril and Maxo, is expected to benefit from rural demand recovery, innovation-led launches and margin improvements in the coming quarters.
In its latest report, Geojit noted that Jyothy Labs delivered a modest performance in Q1 FY26, with revenue rising 1.4 per cent year-on-year (YoY) on 3.6 per cent volume growth. However, value growth was restricted due to higher grammage and promotional pricing. Gross margin contracted 280 basis points (bps) YoY to 48.5 per cent, pressured by input costs and stiff competition in the dishwashing segment. EBITDA margin came in at 16.5 per cent, in line with the company's guidance, while profit after tax dipped 4.9 per cent to Rs 96.8 crore.
Ad spends were calibrated at Rs 58.9 crore, about 7.8 per cent of revenue, striking a balance between brand investment and profitability. Segment-wise, Fabric Care grew 3 per cent YoY, while Dishwash and Personal Care remained steady. Household Insecticides declined 9.7 per cent but management highlighted revival efforts through new product launches and pricing actions.
The brokerage sees the second half of FY26 as a key driver of growth, supported by festive demand, stabilising input costs and improving urban sentiment. Rural momentum is also expected to stay resilient, aided by favourable monsoon, robust agri output and higher minimum support prices. New launches such as Ujala Young & Fresh, Jovia and Maxo aerosols have shown encouraging traction, with further rollouts planned.
Valuing the stock at 34 times earnings (two-year average: 36x), Geojit has set a target price of Rs 412, implying a 20.93 per cent upside from Friday's closing price of Rs 340.70. The brokerage recommends a 'Buy' rating, citing rural tailwinds, product innovation, brand equity and recent correction in the stock.
Domestic brokerage Geojit has expressed a positive view on Jyothy Labs Ltd, projecting a potential upside of nearly 21 per cent from current levels. The FMCG player, known for brands such as Ujala, Henko, Pril and Maxo, is expected to benefit from rural demand recovery, innovation-led launches and margin improvements in the coming quarters.
In its latest report, Geojit noted that Jyothy Labs delivered a modest performance in Q1 FY26, with revenue rising 1.4 per cent year-on-year (YoY) on 3.6 per cent volume growth. However, value growth was restricted due to higher grammage and promotional pricing. Gross margin contracted 280 basis points (bps) YoY to 48.5 per cent, pressured by input costs and stiff competition in the dishwashing segment. EBITDA margin came in at 16.5 per cent, in line with the company's guidance, while profit after tax dipped 4.9 per cent to Rs 96.8 crore.
Ad spends were calibrated at Rs 58.9 crore, about 7.8 per cent of revenue, striking a balance between brand investment and profitability. Segment-wise, Fabric Care grew 3 per cent YoY, while Dishwash and Personal Care remained steady. Household Insecticides declined 9.7 per cent but management highlighted revival efforts through new product launches and pricing actions.
The brokerage sees the second half of FY26 as a key driver of growth, supported by festive demand, stabilising input costs and improving urban sentiment. Rural momentum is also expected to stay resilient, aided by favourable monsoon, robust agri output and higher minimum support prices. New launches such as Ujala Young & Fresh, Jovia and Maxo aerosols have shown encouraging traction, with further rollouts planned.
Valuing the stock at 34 times earnings (two-year average: 36x), Geojit has set a target price of Rs 412, implying a 20.93 per cent upside from Friday's closing price of Rs 340.70. The brokerage recommends a 'Buy' rating, citing rural tailwinds, product innovation, brand equity and recent correction in the stock.