We initiate Jyothy Labs (JYL) with a high conviction BUY idea, with a TP of Rs 575 (40x June-26 EPS), as it is one of the few FMCG companies structurally poised for high single-digit volume growth, mid-teen EBITDA growth, and high-teen net income growth.
The dividend yield is computed based on the closing price of 5 th June 2024. We have considered companies that have consistently paid dividend in the last 3 years – i.e FY23/CY22, FY22/CY21 and FY21/CY20.
Management notes that occupancy and room rates seen in FY24 point to RevPAR growth likely staying healthy in FY25 too. With industry forecasts suggesting double-digit demand CAGR over FY24–28E vs. supply CAGR of 7– 8%, IHCL feels that ARR trajectory is northbound in the medium term. Hence, it remains confident of double-digit consol. revenue growth in FY25 with new businesses expected to grow >30% YoY alongside asset management driving profitability via a mix of premiumisation of offerings and optimisation of costs
We maintain our BUY rating on the stock with a revised TP at Rs 1,180/share, implying an upside of 37% from the CMP. We believe the current market environment remains conducive for the business and the dilution of equity (around 35 Lc shares to be added) is unlikely to impact the valuation significantly.
With this development, the volatility in the domestic market is likely to remain on the higher side for some time. Against this backdrop, the market positioning is likely to shift towards Quality and Low Volatility stocks with some tilt towards defensive names. Based on this development, the money may flow towards Largecaps in the near term. Hence, we recommend investors to remain invested in the market and use yesterday’s dip to build a position in high-quality companies (where the earnings visibility is quite high) with an investment horizon of 12-18 months
Neogen Chemicals’ (NCL’s) earnings will grow at a CAGR of 43% over FY24- 30E while RoE will improve from 6% in FY24 to 23% in FY30E. New-age chemicals from its battery material business will drive growth
VREL added 10 stores in Q4 and store addition for FY24 stood at 15 (net). Over the last two quarters (14 net additions), footprint expansion has picked up pace as business has started generating healthy margins. VREL’s store rationalisation program is now complete and we don’t expect store addition to further pick up from here on as its new stores are witnessing healthy throughput and SSSG from mature stores is also strong
We hold a positive outlook on Apollo’s future, driven by favourable demand dynamics. We anticipate strong performance in both healthcare services and the pharmacy segment. Furthermore, we anticipate AHLL to achieve remarkable outcomes. Based on SOTP valuation we arrive at target price of 7,230 (implied EV/EBITDA multiple of 25.5 on its FY26E EBITDA), offering 24% upside from current levels. Buy.
NOCIL reported weak operational performance during the quarter. Revenue de-grew by ~9% YoY but grew by ~5% QoQ. Volume grew by 2% YoY & 12% QoQ largely led by strong offtake in export market, although realization remained weak declining by 11% YoY & 7% QoQ. Domestic market remained muted because of heavy imports from China & it is anticipated to continue in the coming quarters as well.
JB Chemicals and Pharmaceuticals Ltd (JBCP) is a rapidly growing mid-sized pharmaceutical company in India, focusing on expanding its domestic presence through strategic acquisitions and CDMO business scaling up. In India, JBCP’s growth is accelerated by the market share gain and Rx increase in the acquired portfolio, successful lifecycle management of key brands, and increased contribution by domestic portfolio from 41.6% in FY18 to 54.4% in FY24
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