JHS Svendgaard - Very Strong Q3-FY18 Results. Re-Iterate Our Investment Thesis.

JHS Svendgaard – 35% Topline Growth and 2x PBT in FY18 – Maintain Investment Thesis

Independent Research Analyst

Mamta Verma

DC India Research

DC India Research LLP (DCIR) is based out of Mumbai, India.

We specialize in providing customized, independent research across listed and unlisted companies in India across equities and credit including sectoral research. Our customers include India focussed PE funds, special situation funds, domestic AMCs, Wealth Advisory& PMS firms, Rating Agencies & Investment Advisors. 

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Equity Bottom-Up

JHS Svendgaard Laboratories / Equity Bottom-Up

Q2 FY18 Results<ul>
<li>Net sales were flat YoY but 12% up QoQ.</li>
<li>Gross margins improved by 120bps YoY and 160bps QoQ.</li>
<li>Sharp jump in EBITDA margins, from 5% in Q1FY18 to 13.7% in Q2FY18 vs. 10% in Q2FY18 mainly propelled by benefits of operating leverage.</li>
<li>Q1FY18 PAT included one-time settlement income (Rs 27.3 crore) from its earlier customer – P&amp;G – after a prolonged arbitration. Excluding the same, PAT increased from Rs. 2mn in Q1FY18 to Rs. 23mn in Q2FY18.</li>
<li>Overall, strong set of results along our lines of…</li>
</ul>

 Q2 FY18 Results
Net sales were flat YoY but 12% up QoQ.
Gross margins improved by 120bps YoY and 160bps QoQ.
Sharp jump in EBITDA margins, from 5% in Q1FY18 to 13.7% in Q2FY18 vs. 10% in Q2FY18 mainly propelled by benefits of operating leverage.
Q1FY18 PAT included one-time settlement income (Rs 27.3 crore) from its earlier customer – P&amp;G – after a prolonged arbitration. Excluding the same, PAT increased from Rs. 2mn in Q1FY18 to Rs. 23mn in Q2FY18.
Overall, strong set of results along our lines of…


JHS Svendgaard - Strong Op'al Perf Q2FY18; High Conviction with Twin Levers of Earnings & Re-Rating