JHS Svendgaard expect to clock 20-30% revenue growth in FY18
JHS Svendgaard Laboratories manufactures oral and dental products. The stock is trading at a fresh 52-week high and has gained 83 percent so far in FY18.
In an interview to CNBC-TV18, Nikhil Nanda, MD of the company gave his outlook for the year.
We do roughly about 50 percent from toothbrushes and 50 percent from toothpaste currently, said Nanda. Our new toothpaste facility will be completed in the June and shall be operational from July 1.
Our own brand is about 10 percent of the overall sales of the company, he said. We are consciously trying to grow to about 50 percent by 2020, he added.
JHS Svendgaard's current clientele includes Dabur, Patanjali and Amway. The company receives 65 percent of revenue from these three top clients.
We are confident of doing 20-30 percent growth in this financial year, said Nanda.
Happy Investing
Source:Moneycontrol.com
JHS is engaged further in aggressive capacity expansion almost tune of 30cr towards additional manufacturing unit. The overall capacity in toothbrushes to increase from 150 million to 250 million till march 2018, For toothpaste from 90 million to 175 million toothpaste till July 2017. The Aggressive Capex is backed by visibility of business from some of larger clients including Patanjali and Dabur. Alongwith, JHS own brand Acquawhite is scaling distribution and company intend to significantly strengthen the brand franchisee and product positioning in coming months. Interestingly the company shall continue to debtfree coupled with strategic equity investors who understands the business and have provided a significant part of the company`s precious growth capital with long term goals in mind.
ReplyDeleteLet me begin with a disclosure that I hold this stock from low 30 levels and therefore have sufficient margin of safety embedded into my purchase price. Having said that, the results from the last 5 quarters have been on the right track as the company seems to have finally turned around from being a loss making and litigation-entangled one into a profit making one. The latest result has shown a healthy growth in the topline in a tough GST-affected quarter and the bottomline has suffered slightly because of an unexpected expense in the form of Excise Duty. Their main customers are doing well and the company is currently expanding the capacity to meet the increasing demand. The 27 Crore one time settlement amount from P&G is timely in that regard as it will enable the expansions without resorting to the debt route. The litigation with P&G was a long running one and the settlement made by P&G was a surprise in the absense of any ruling or trigger. Reading between the lines, one may assume that P&G has decided to bury the hatchet and intends to resume business with JHS. If this assumption materializes, it would be a great boost to the company as it is already doing well with its other major clients namely Patanjali, Dabur, etc. So we have a debt-free company that is a profit making FMCG supplier/emerging player at a trailing PE of around 14 and good tail winds behind it. It`s time to do your due diligence before deciding to invest your hard earned money.
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