Broker’s Call: Jyothy Labs (Hold)

Why It Matters

The rating reflects modest top‑line growth tempered by margin pressure, signalling limited upside for investors while the firm pursues a volume‑driven recovery.

Key Takeaways

• Revenue rose 5% to ₹740 crore in Q3FY26.
• Volume growth 7.2% driven by rural demand.
• Gross margin fell 326 bps to 46.5%.
• Target price ₹270, current price ₹249.85.
• Aiming double‑digit volume growth in FY27.

Pulse Analysis

Jyothy Labs’ Q3FY26 results illustrate how mid‑tier consumer‑goods firms are navigating a mixed demand landscape. Rural markets remain resilient, delivering 7.2% volume growth, while urban consumption shows early signs of recovery. Segmentally, the firm posted double‑digit growth in fabric care (9.2%), personal care (10.9%) and household insecticides (12.6%), underscoring the strength of its core product portfolio. However, the dish‑wash segment’s muted value performance highlights the challenges of price‑sensitive categories amid competitive discounting.

Margin compression emerged as a key concern, with gross margin slipping 326 basis points to 46.5%. The decline stems from aggressive price reductions, higher consumer offers, and inflationary pressures on raw‑material costs. To counteract this, Jyothy Labs is sharpening its focus on premiumisation and a richer product mix, aiming to lift average selling prices without sacrificing volume. Accelerating new product launches and disciplined brand‑building investments are intended to cushion margins while expanding market share.

From an investment perspective, Axis Securities’ Hold rating and revised target of ₹270 reflect a balanced view of growth prospects versus margin headwinds. The firm’s strategic emphasis on volume‑led expansion and double‑digit growth targets for FY27 aligns with a broader recovery in consumer spending, supported by a stable macro environment. Investors should monitor the effectiveness of premiumisation initiatives and the company’s ability to sustain volume momentum without further eroding profitability.

Broker’s Call: Jyothy Labs (Hold)

The Hindu BusinessLine

Broker’s Call: Jyothy Labs (Hold)

Axis Securities

Updated – February 10 2026 at 05:07 PM

Target: ₹270

Current Market Price (CMP): ₹249.85

Jyothy Labs delivered a steady Q3FY26 performance, with revenues rising 5 per cent to ₹740 crore, underpinned by healthy volume growth of 7.2 per cent. Rural demand remained firm, while urban consumption showed early signs of recovery, aiding a gradual improvement in overall volume momentum. Across segments, Fabric Care, Personal Care, and Household Insecticides delivered robust growth of 9.2 per cent, 10.9 per cent and 12.6 per cent, respectively. In contrast, the Dishwash segment saw volume expansion but muted value performance, reflecting the impact of price cuts and grammage‑led offers.

The company’s gross margin declined 326 bps to 46.5 per cent, impacted by lowering of prices, higher consumer offers and inflationary price trends in select commodities.

It is sharpening its focus on volume‑led expansion, with a clear objective of returning to a double‑digit growth trajectory over the near term and remains cautiously optimistic about a sustained recovery in consumption. Strategic priorities include driving a richer product mix through premiumisation, accelerating the scale‑up of new launches to cushion margins, and maintaining disciplined investments in brand building and innovation. With consumption trends stabilising and the macro environment remaining supportive, the management remains confident of entering FY27 with strong momentum and double‑digit volume growth.

We have cut our EPS FY26/FY27 estimates and maintain our Hold rating on the stock and revise our TP to ₹270 per share.

Published on February 10 2026