Now Reading: Jyothy Labs margin halves on West Asia crisis and Henkel exit
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Jyothy Labs margin halves on West Asia crisis and Henkel exit
Jyothy Labs’ operating margin nearly halved to 8.4% in the April-June quarter, from 16.5% a year ago, as higher raw material costs from the West Asia war and German partner Henkel AG’s…
The Story in Brief
Jyothy Labs’ operating margin nearly halved to 8.4% in the April-June quarter, from 16.5% a year ago, as higher raw material costs from the West Asia war and German partner Henkel AG’s exit from a 15-year licensing deal for Pril and Fa brands hit profitability. Despite a 4-4.5% price hike, net profit more than halved to Rs 47.6 crore from Rs 96.8 crore. Chairperson M. R. Jyothy said raw material costs may ease only from October. Excluding Pril, revenue grew 8.1% and volume 5.3%. The company is in litigation over Henkel’s exit.
Jyothy Labs reported total revenue of Rs 773 crore, up 3% year-on-year. Fabric care, its largest segment, posted 10% volume and 14% value growth. The company has launched Exo dishwash liquid to replace Pril but analysts at Equirus Securities called the results a miss on all fronts, while Nomura noted 15% year-on-year rise in key chemical prices.
The Indian Opinion
The usual corporate spin about ‘gradual recovery’ should not distract from the fact that Jyothy Labs was caught flat-footed by both crude volatility and a key partner’s walkout after 15 years. The 28% year-to-date stock slide suggests the market is not buying the double-digit growth forecast. The real test will come in the December quarter numbers: if margins do not visibly improve by then, management’s assurances will ring hollow. Can a new dishwash brand truly replace Pril’s premium share? Watch for Exo’s market share data.
Source: livemint.com
This story was synthesised by AI from the source linked above.
