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<ul><li><keyword id="158950" type="General" weightage="20" keywordseo="jyothy-labs" source="Orion">Jyothy Labs</keyword> is modernising its retail strategy, by expanding its sales force, selling directly via e-commerce and more.</li><li>It also increased its geographic footprint, bringing in the Low Unit Pack (LUP) strategy, which helped clock growth in times of rural slowdown.</li><li>The stock is currently trading at a discount in spite of showing better growth than its peers, say analysts. </li></ul>Mumbai-based FMCG company Jyothy Labs (JLL) is on a firm footing and that’s reflecting in the stock’s performance – it has given 48.7% returns in the last one year. The maker of household brands like Pril, Henko, Margo and Ujala has been modernising at a rapid pace and spreading its wings fast and wide. It’s sending its sales force directly to over 1.1 million outlets compared with 8.5 lakh before Covid. Moreover, it has plans to expand this to 1.2 million by the end of the current financial year. “Product innovation and availability of relevant product assortment for general trade, e-commerce, modern trade and distribution expansion will help JLL to continue to gain market share in key categories,” says Sharekhan. It has also doubled its sales force to 3,000 compared with pre-Covid levels. It’s also implementing sales forces automation – app-based order-taking by sales staff vs manual order-taking earlier. “This increases productivity of sales staff, and ensures that orders taken are fulfilled as the sales staff has visibility of distributor stock while taking orders. Consequently, salience of wholesale has been reduced from around 40% to 35% in recent years,” says a report by IIFL Securities. Moreover, the volatility it has been seeing in sales growth since FY18 has steadied in the last seven quarters with top line growth staying steadfastly above 10%. The fast-moving consumer goods (FMCG) company has been able to achieve growth despite input price inflation and slowdown in volume growth, especially in rural India. Apart from its changed quality and quantity of distribution strategy, it has also increased its geographic footprint and adopted a LUP strategy – selling in small packets to counter the stress on buyers due to inflation – which has helped grow its dishwasher category in particular. Sales growth has been steady over the past two years, and should continue to drive growth in future as well, opines IIFL. The blockbuster brands The company, which was set up in 1983, has charted an impressive growth path over the past few decades, evolving from a South-centric, single-product – Ujala – company, to a pan-India player with multiple products across categories. It was able to retain its leadership position in the fabric whitener category, and occupies the second rank in the dishwasher bar category. Mr. White, Morelight and Ujala IDD are already ₹100 crore-plus brands each. And the company is now looking to build scale in the fabric care category. “It expects to achieve double-digit growth in dishwashing in FY24 and gain market share in the fast-growing category. The company aims to strengthen the Margo franchise, which will help increase share of personal care in the company’s portfolio,” says a report by Sharekhan. Margo is a soap brand that the company acquired in 2011. The company’s overall revenue is expected to grow at a compounded annual growth rate (CAGR) of 13-14% over FY23-FY25, Sharekhan says. Where’s the growth? Like most of its peers, the mid-cap stock will also improve its operating margins in the coming quarters. However, stock analysts believe that its margin recovery will be better than its peers, and so will the growth in its top line and bottomline. What’s also different about this FMCG company is that it’s trading at a discount, unlike its peers. “The stock trades at 23 time FY25 PE (price to earnings ratio), nearly half that of other FMCG companies with similar performance. As consistent performance continues, we believe that this discount will narrow,” said IIFL Securities, which maintains its ‘buy’ rating on the stock with a target price of ₹280. The stock is currently trading at ₹246 apiece. Moreover, JLL’s net cash position has swung from negative ₹253 crore in FY20 to ₹283 crore in FY23. Working capital days have reduced from 42 days in FY20 to 29 days in FY23 and have also remained consistent at 27-29 in the last three years. “With stable working capital management and expected improvement in the profitability, the company is likely to generate high cash in the coming years. With limited capex plan, the company will invest behind improving brand prospects and rewarding shareholders with higher dividend payout,” says Sharekhan. The brokerage too has maintained a ‘buy’ rating on the stock with a target price of ₹275. SEE ALSO <a href="https://www.businessinsider.in/stock-market/news/the-french-connection-hal-has-most-to-gain-submarines-yet-to-surface-for-mazagon-dock/articleshow/101952765.cms">The French connection: HAL has most to gain; submarines yet to surface for Mazagon Dock</a> <a href="https://www.businessinsider.in/india/news/few-indians-are-giving-up-on-tomatoes-despite-red-hot-prices-subsidies-arent-helping-much-shows-survey/articleshow/101920571.cms">Few Indians are giving up on tomatoes despite red hot prices, subsidies aren’t helping much, shows survey</a>

This FMCG stock is trading at a discount to peers despite growth outpacing rivals

<ul><li>India’s benchmark indices <keyword id="6484188" type="General" weightage="20" keywordseo="sensex" source="Orion">Sensex</keyword> and <keyword id="2931774" type="General" weightage="20" keywordseo="nifty50" source="Orion">Nifty50</keyword> edged lower in morning trade on Wednesday amid jittery markets worldwide. </li><li>PSU bank and IT stocks declined in morning trade amid jitters in the US banking sector. </li><li>Both the indices were down 0.3%, with Sensex trading at 61,154 points and Nifty50 at 18,088 points. </li></ul>India’s benchmark indices Sensex and Nifty50 edged lower in morning trade on Wednesday amid jittery markets worldwide. PSU bank and IT stocks declined in morning trade amid jitters in the US banking sector. Both the indices were down 0.3%, with Sensex trading at 61,154 points and Nifty50 at 18,088 points. The top five active stocks were all heavyweights, including HDFC Bank, Reliance Industries, TCS, among others. Top gainers and losers on Nifty50 <table style="border-width: initial; border-style: none;"></colgroup><tbody><tr><td style="border-left:solid #000000 0.5pt;border-right:solid #000000 0.5pt;border-bottom:solid #000000 1pt;border-top:solid #000000 0.5pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Top gainers </td><td style="border-left:solid #000000 0.5pt;border-right:solid #000000 0.5pt;border-bottom:solid #000000 1pt;border-top:solid #000000 0.5pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Change </td><td style="border-left:solid #000000 0.5pt;border-right:solid #000000 0.5pt;border-bottom:solid #000000 1pt;border-top:solid #000000 0.5pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Top losers </td><td style="border-left:solid #000000 0.5pt;border-right:solid #000000 0.5pt;border-bottom:solid #000000 1pt;border-top:solid #000000 0.5pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Change </td></tr><tr><td style="border-left:solid #000000 0.5pt;border-right:solid #000000 0.5pt;border-bottom:solid #000000 0.5pt;border-top:solid #000000 1pt;vertical-align:top;background-color:#d9d9d9;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Asian Paints </td><td style="border-left:solid #000000 0.5pt;border-right:solid #000000 0.5pt;border-bottom:solid #000000 0.5pt;border-top:solid #000000 1pt;vertical-align:top;background-color:#d9d9d9;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">1.12% </td><td style="border-left:solid #000000 0.5pt;border-right:solid #000000 0.5pt;border-bottom:solid #000000 0.5pt;border-top:solid #000000 1pt;vertical-align:top;background-color:#d9d9d9;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Hindalco Industries </td><td style="border-left:solid #000000 0.5pt;border-right:solid #000000 0.5pt;border-bottom:solid #000000 0.5pt;border-top:solid #000000 1pt;vertical-align:top;background-color:#d9d9d9;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">-1.65% </td></tr><tr><td style="border-left:solid #000000 0.5pt;border-right:solid #000000 0.5pt;border-bottom:solid #000000 0.5pt;border-top:solid #000000 0.5pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">ITC </td><td style="border-left:solid #000000 0.5pt;border-right:solid #000000 0.5pt;border-bottom:solid #000000 0.5pt;border-top:solid #000000 0.5pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">0.77% </td><td style="border-left:solid #000000 0.5pt;border-right:solid #000000 0.5pt;border-bottom:solid #000000 0.5pt;border-top:solid #000000 0.5pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">ONGC </td><td style="border-left:solid #000000 0.5pt;border-right:solid #000000 0.5pt;border-bottom:solid #000000 0.5pt;border-top:solid #000000 0.5pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">-1.40% </td></tr><tr><td style="border-left:solid #000000 0.5pt;border-right:solid #000000 0.5pt;border-bottom:solid #000000 0.5pt;border-top:solid #000000 0.5pt;vertical-align:top;background-color:#d9d9d9;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Hindustan Unilever </td><td style="border-left:solid #000000 0.5pt;border-right:solid #000000 0.5pt;border-bottom:solid #000000 0.5pt;border-top:solid #000000 0.5pt;vertical-align:top;background-color:#d9d9d9;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">0.75% </td><td style="border-left:solid #000000 0.5pt;border-right:solid #000000 0.5pt;border-bottom:solid #000000 0.5pt;border-top:solid #000000 0.5pt;vertical-align:top;background-color:#d9d9d9;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">JSW Steel </td><td style="border-left:solid #000000 0.5pt;border-right:solid #000000 0.5pt;border-bottom:solid #000000 0.5pt;border-top:solid #000000 0.5pt;vertical-align:top;background-color:#d9d9d9;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">-1.10% </td></tr><tr><td style="border-left:solid #000000 0.5pt;border-right:solid #000000 0.5pt;border-bottom:solid #000000 0.5pt;border-top:solid #000000 0.5pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Adani Enterprises </td><td style="border-left:solid #000000 0.5pt;border-right:solid #000000 0.5pt;border-bottom:solid #000000 0.5pt;border-top:solid #000000 0.5pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">0.62% </td><td style="border-left:solid #000000 0.5pt;border-right:solid #000000 0.5pt;border-bottom:solid #000000 0.5pt;border-top:solid #000000 0.5pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Britannia </td><td style="border-left:solid #000000 0.5pt;border-right:solid #000000 0.5pt;border-bottom:solid #000000 0.5pt;border-top:solid #000000 0.5pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">-1.09% </td></tr><tr><td style="border-left:solid #000000 0.5pt;border-right:solid #000000 0.5pt;border-bottom:solid #000000 0.5pt;border-top:solid #000000 0.5pt;vertical-align:top;background-color:#d9d9d9;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Coal India </td><td style="border-left:solid #000000 0.5pt;border-right:solid #000000 0.5pt;border-bottom:solid #000000 0.5pt;border-top:solid #000000 0.5pt;vertical-align:top;background-color:#d9d9d9;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">0.61% </td><td style="border-left:solid #000000 0.5pt;border-right:solid #000000 0.5pt;border-bottom:solid #000000 0.5pt;border-top:solid #000000 0.5pt;vertical-align:top;background-color:#d9d9d9;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Bajaj Finance </td><td style="border-left:solid #000000 0.5pt;border-right:solid #000000 0.5pt;border-bottom:solid #000000 0.5pt;border-top:solid #000000 0.5pt;vertical-align:top;background-color:#d9d9d9;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">-1.03% </td></tr></tbody></table> Source: NSE, as on May 3, 2023 Earlier on Tuesday, Sensex closed 0.4% higher while Nifty50 gained 0.46% led by energy, metal and IT stocks. Gold prices spiked amid mounting growth concerns around the world. Gold gained 1.41% to cross the ₹60,000 level once again to close at ₹60,605 per 10 grams. On the other hand, crude oil prices fell sharply, with Brent crude hovering around $75.5 per barrel, down from the $79 levels. The US Fed’s FOMC is also expected to announce a 25 basis point rate hike this week. <cmsannotation type="cmsannotation" annotationid="Global markets feel the jitters" comment="subhead" text="Global markets feel the jitters">Global markets feel the jitters</cmsannotation> Mounting risks of a contagion in the US’ regional banking sector has made investors jittery – two banks, PacWest Bancorp and Western Alliance both fell by over 25% on Tuesday. The sell-off was visible in the wider markets as well, with Dow Jones falling by 1.1% while S&amp;P 500 was down 1.2%. The tech-heavy Nasdaq fell 1.1%. Asian markets were largely in the red, with Hang Seng falling the most at 1.6%, followed by KOSPI which was down 0.9%. Taiwan Weighted fell 0.5%, while Nikkei 225 rose 0.1%. The Shanghai Composite, on the other hand, was up 1.1%. <cmsannotation type="cmsannotation" annotationid="Stocks to watch" comment="subhead" text="Stocks to watch"><keyword id="73648" type="General" weightage="20" keywordseo="stocks-to-watch" source="Orion">Stocks to watch</keyword></cmsannotation> <keyword id="6357147" type="General" weightage="20" keywordseo="tata-steel" source="Orion">Tata Steel</keyword>: The Tata Group company reported 84% on year decline in consolidated net profit at ₹1,566 crore in March quarter while revenue from operations dropped 9.2% to ₹62,961 crore. <keyword id="105382" type="General" weightage="20" keywordseo="ambuja-cements" source="Orion">Ambuja Cements</keyword>: The cement manufacturer reported a standalone net profit of ₹502 crore in the March quarter, seeing an increase of 1.6% YoY, with restructuring costs impacting the profitability. Revenue grew 8.4% YoY to ₹4,256 crore, while volumes grew 8% during the quarter. Bharti <keyword id="15491" type="General" weightage="20" keywordseo="airtel" source="Orion">Airtel</keyword>: The telecom operator has merged its operations of Bharti Airtel Lanka with Dialog, a subsidiary of Malaysian multinational telecommunications conglomerate Axiata Group Berhad. The move will give the company a larger user base in Sri Lanka. Fino Payments Bank: The company has reported 25% growth in March quarter net profit at ₹22 crore while total income rose 13% to ₹323 crore. Earnings today: Titan, Adani Wilmar, Bajaj Consumer Care, Godrej Properties, Tata Chemicals, MRF, ABB India, Havells India, Jyothy Labs, KEC International, Sula Vineyards, Anupam Rasayan are among companies to report their quarterly earnings today. SEE ALSO: <a href="https://www.businessinsider.in/investment/news/silver-may-offer-an-attractive-investment-option-as-china-reopens/articleshow/99944101.cms">Silver on an upswing – The metal may offer an attractive investment option as China reopens</a> <a href="https://www.businessinsider.in/business/corporates/news/adani-total-gas-reports-8-rise-in-fy23-net-profit-to-546-croreannounces-plans-to-expand-ev-charging-points-to-3000/articleshow/99936234.cms">Adani Total Gas reports 8% rise in FY23 net profit to ₹546 crore,announces plans to expand EV charging points to 3,000</a>

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This FMCG stock is trading at a discount to peers despite growth outpacing rivals

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