Jyothy Laboratories Net Income jumped on 48.7% in 2015 and EBITDA Margin increased slightly on 0.89 pp from 11.9% to 12.8%

25-05-2015 • About Jyothy Laboratories ($JYOTHYLAB) • By InTwits

Jyothy Laboratories reported FY2015 financial results today. Overall the company's long term financial model is characterised by the following facts:

Jyothy Laboratories has low CAPEX intensity: 5 year average CAPEX/Revenue was 2.6%. At the same time it's in pair with industry average of 11.5%.
CAPEX is quite volatile: 211 in FY2015, 1,941 in FY2014, 4,346 in FY2013, 4,084 in FY2012, 4,033 in FY2011
The company has highly profitable business model: ROIC is at 12.1%
It operates with medium-size leverage: Net Debt/EBITDA is 2.8x while industry average is 2.7x

Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.

Jyothy Laboratories ($JYOTHYLAB) key annual financial indicators

mln. INR	2011	2012	2013	2014	2015	2015/2014
P&L
Revenue	6,195	9,126	11,042	13,184	15,053	14.2%
EBITDA	847	869	1,309	1,573	1,931	22.7%
Net Income	688	446	196	814	1,211	48.7%
Balance Sheet
Cash	2,795	662	192	354	309	-12.5%
Short Term Debt	583	1,237	2,027	68	1,204	1,676.1%
Long Term Debt	77	4,379	4,268	5,268	4,490	-14.8%
Cash flow
Capex	288	247	279	237	171	-28.0%
Ratios
Revenue growth	-65.8%	47.3%	21.0%	19.4%	14.2%
EBITDA growth	-12.7%	2.6%	50.7%	20.2%	22.7%
EBITDA Margin	13.7%	9.5%	11.9%	11.9%	12.8%	0.9%
Net Income Margin	11.1%	4.9%	1.8%	6.2%	8.0%	1.9%
CAPEX, % of revenue	4.6%	2.7%	2.5%	1.8%	1.1%	-0.7%
ROIC	12.6%	6.5%	8.7%	10.3%	12.1%	1.7%
ROE	13.5%	7.2%	3.1%	11.9%	16.0%	4.1%
Net Debt/EBITDA	-2.5x	5.7x	4.7x	3.2x	2.8x	-0.4x

Revenue and profitability

Jyothy Laboratories's Revenue surged on 14.2% in FY2015. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin increased on 2.6 pp from 2.4% to 5.0% in FY2015.

Net Income marign increased slightly on 1.9 pp from 6.2% to 8.0% in FY2015.

Capital expenditures (CAPEX) and working capital investments

The company's CAPEX/Revenue was 1.1% in FY2015. CAPEX/Revenue decreased slightly on 1.6 pp from 2.7% in FY2012 to 1.1% in FY2015. For the last three years the average CAPEX/Revenue was 1.8%.

Return on investment

The company operates at good ROIC (12.09%) and ROE (16.00%). ROIC increased slightly on 1.7 pp from 10.3% to 12.1% in FY2015. ROE increased on 4.1 pp from 11.9% to 16.0% in FY2015.

Leverage (Debt)

Debt level is 2.8x Net Debt / EBITDA and 2.9x Debt / EBITDA. Net Debt / EBITDA dropped on 0.4x from 3.2x to 2.8x in FY2015. Debt increased on 6.7% in FY2015 while cash dropped on 12.5% in FY2015.

Valuation

Jyothy Laboratories's trades at EV/EBITDA 27.5x and P/E 39.3x while industy averages are 10.5x and 26.1x. The company's EV/(EBITDA-CAPEX) is 30.1x with the industry average at 4.7x.

Appendix 1: Peers in Household Products

Below you can find Jyothy Laboratories benchmarking vs. other companies in Household Products industry. It's shown for the period of 5 years for the key financial metrics. Each table has median value for all the companies in the industry together with individual financial data of the top-5 companies in the industry by particular financial metric.

Top companies by Revenue growth, %


Top	FY2011	FY2012	FY2013	FY2014	FY2015
Ess Dee Aluminium ($ESSDEE)	-33.8%	-3.2%	9.1%	0.1%
Median (1 company)	-33.8%	-3.2%	9.1%	0.1%
Jyothy Laboratories ($JYOTHYLAB)		47.3%	21.0%	19.4%	14.2%

Top companies by EBITDA margin, %


Top	FY2011	FY2012	FY2013	FY2014	FY2015
Ess Dee Aluminium ($ESSDEE)	26.6%	23.3%	21.9%	24.7%
Median (1 company)	26.6%	23.3%	21.9%	24.7%
Jyothy Laboratories ($JYOTHYLAB)	13.7%	9.5%	11.9%	11.9%	12.8%

Top companies by CAPEX/Revenue, %


Top	FY2011	FY2012	FY2013	FY2014	FY2015
Ess Dee Aluminium ($ESSDEE)	23.2%	19.3%	16.8%	35.2%
Median (1 company)	23.2%	19.3%	16.8%	35.2%
Jyothy Laboratories ($JYOTHYLAB)	4.6%	2.7%	2.5%	1.8%	1.1%

Top companies by ROIC, %


Top	FY2011	FY2012	FY2013	FY2014	FY2015
Ess Dee Aluminium ($ESSDEE)	21.7%	11.4%	9.9%	10.2%
Hipolin ($HIPOLIN)	-3.3%	2.2%	3.3%
Pee Cee Cosma Sope ($PCCOSMA)	0.6%	6.7%
Median (3 companies)	0.6%	6.7%	6.6%	10.2%
Jyothy Laboratories ($JYOTHYLAB)	12.6%	6.5%	8.7%	10.3%	12.1%

Top companies by Net Debt / EBITDA


Top	FY2011	FY2012	FY2013	FY2014	FY2015
Ess Dee Aluminium ($ESSDEE)	1.1x	2.2x	2.4x	2.6x
Median (1 company)	3.1x	2.2x	3.6x	2.6x
Jyothy Laboratories ($JYOTHYLAB)	-2.5x	5.7x	4.7x	3.2x	2.8x

Jyothy Laboratories stock price chart

Jyothy Laboratories financials

mln.	FY2010	FY2011	FY2012

Revenue	18,139	6,195	9,126
EBITDA	970.8	847.1	868.7
Net income	743.4	687.6	445.8
CAPEX	347.8	287.8	246.6
Debt	130.5	660.6	5,616
Cash	302.5	2,795	662.2

About Jyothy Laboratories

Jyothy Laboratories Limited manufactures and markets fabric whiteners, soaps, detergents, mosquito repellents, scrubbers, and incense sticks primarily in India. It operates through four segments: Soaps and Detergents, Home Care, Laundry services, and Others. The company offers liquid fabric whiteners under the Ujala Supreme brand; washing powders under the Ujala Super Washing Powder brand; fabric enhancers under the Ujala Stiff & Shine brand; and detergents under the Ujala Techno Bright brand. It also provides household insecticides, including coils and mosquito repellants under the Maxo A Grade Coils brand name; household kit under the Maxo Aerosol brand name; and liquid vaporizers under the Maxo A Grade Liquid brand name. In addition, the company offers utensil cleaners, such as wash bar and wash liquid under the Exo brand name; incense sticks under the Maya brand name; and beauty soaps under the Jeeva Naturals brand name. Further, the company provides tea and coffee; fabric care services; and laundry services, including dry cleaning, as well as offers linen on rental. Additionally, it personal care products, laundry products, home care products, cosmetics, and toiletries under the Pril, Henko, Fa, Margo, Mr. White, and Chek brand names. The company was founded in 1983 and is based in Mumbai, India.