Jyothy Laboratories shares surged as much as 15.74 per cent in the early trade on Thursday after Business Standard reported that German consumer goods major Henkel AG may invest in Jyothy Laboratories this year.
At 9.36 am, shares of Jyothy Laboratories were trading were trading 8.19 per cent up at Rs 302.65. The scrip opened at Rs 320 and has touched a high and low of Rs 323.80 and Rs 299, respectively, in trade so far. The benchmark BSE Sensex was trading 8.97 points, or 0.03 per cent, down at 26,704.96.
According to the report, Henkel had the option to pick up to 26 per cent stake in Jyothy Laboratories (JLL) five years after the latter acquired its Indian subsidiary in May 2011.
For the quarter ended March 31, 2016, the company reported a consolidated net profit of Rs 35.61 crore, up 31.60 per cent, against Rs 27.06 crore in the corresponding quarter a year ago. Consolidated gross sales of the company grew 12.39 per cent year-on-year to Rs 445.21 crore against Rs 396.12 crore in the same period.
As on March 31, 2016, promoters hold 66.74 per cent stake in Jyothy Laboratories.
Later, Jyothy Laboratories informed in a clarification to BSE said, “As of now there is no development in this regard and the report is speculative. In case there is any development, we shall inform the stock exchanges.” The share price of Jyothy Laboratories closed 3.47 per cent up at Rs 289.45. Sensex settled 129.21 points, or 0.48 per cent, up at 26,843.14.
Sharkhan in a research report on May 24 said, “We have broadly maintained our earnings estimates for FY2017 and FY2018. We expect JLL’s revenues to grow at a CAGR of 15 per cent over FY2016-18 (driven by double-digit volume growth) and the PAT to grow at a CAGR of 17 per cent over FY2016-18. However, uncertainty prevails related to possible exercise of option by Henkel to acquire 26 per cent in JLL in the near term. We have maintained our ‘Buy’ recommendation on Jyothy Laboratories shares with an unchanged price target of Rs 360.”