Captains Speak     

Published: January 31, 2025
Updated: January 31, 2025

Jyothy Labs

Rural and retail will be the thrust areas

Pointing out that “the commodity inflation trend has been mixed, and that though caustic soda, soda ash and linear alkyl benzene (LAB) prices remain elevated, Jyothy Labs was benefited with the steep decline in palm oil and some packaging materials like linear alkyl benzene and polypropylene, MR Jyothy, Chairperson and Managing Director, added that the company was able to maintain last year’s gross margin with some relief in commodity costs. The EBITDA margin during Q2FY25 was at 18.9 per cent as compared to 18.5 per cent in the same quarter last year.” Ms Jyothy was addressing a conference call to discuss the results of Q2FY25.

Reviewing the performance of the company during Q2FY25, Ms Jyothy said that for the quarter ending September 30, 2024, consolidated sales reached Rs 734 crore, a 0.2% growth in value and 3% in volume against a base of 11% value growth in the same period last year. In the current quarter, the variance between value and volume growth is primarily due to increased grammages and select SKU price cuts.

According to her, the company saw an improvement in rural demand accompanied by robust growth in its ecommerce and quick commerce channels. The gross margin for the quarter stands at 50.2% compared to 49.2% in the same period last year, with palm oil prices remaining an exception to the otherwise stable raw and packing material costs. “We anticipate some price increase in the soap categories in quarter 3. Advertising and promotional spending was 8.3% for the quarter, an increase of 6.4% over the same period last year. Despite softer consumer demand and seasonal impacts, we remain focused on ensuring strong brand visibility. Operating EBITDA is at 18.9% compared to 18.5% in the same quarter last year, with a PAT of Rs 105 crore. For the half year, revenue reached Rs 1,476 crore, an increase of 4% and 7% in volume with a gross margin of 50.7%. The operating EBITDA margin for the half year is 18.4%, an increase of 7.6% from the same period last year. We are maintaining 9 days of operating working capital and remain debt-free,” Ms Jyothy said.

DIVIDEND PAYOUT

Pointing out that “with a strong cash reserve of Rs 659 crore following a dividend payout of Rs 128 crore, it is well-positioned for future growth initiatives,” Ms Jyothy added that the company continued to place a strong focus on its post-wash products. “Ujala Supreme, the main lead in this segment, was well supported by a pan-India multimedia campaign. Additionally, partnerships in key markets with landmark events such as Pandharpur in Maharashtra and the Puri Rath Yatra in Odisha have shown impressive consumer engagement,” she added.

According to her, the company has roped in actress Vidya Balan as the new brand ambassador for Ujala Supreme. Its latest campaign featuring her went live in October 2024. Pril liquid has maintained its marketshare at 14% with a sustained multimedia campaign. It is committed to expanding the liquid vaporizer category, with Maxo liquid vaporizer experiencing strong double-digit growth this quarter compared to a category growth of 2%. It aligns with its strategy to focus more on the liquid format. EBITDA of 18.9% for the quarter indicates better operational efficiency. At the half-year mark, 7% volume growth indicates that its strategic approach and initiatives can keep up the growth momentum. The growth in marketshare of its brands highlights the consumer trust they have built.

Referring to the future growth strategy, she revealed that going forward, the strategy includes deepening the distribution network in rural markets and expanding its direct retail presence. Volume growth will be a key metric as it focuses both on rural and urban segments through targeted innovation and a strengthened distribution network. It remains optimistic about the long-term potential for growth through premiumization and operational efficiencies. “Jyothy Labs continues to focus on sustainable and profitable avenues to meet evolving consumer needs, ensuring our legacy as a household name in India. We remain steadfast in our commitment to brand investments, distribution expansion, cost optimization and new category adoption,” she added.