Now Reading: Jyothy Labs margin halves on crude costs, Henkel exit
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Jyothy Labs margin halves on crude costs, Henkel exit
Jyothy Labs' operating margin nearly halved to 8.4% in the April-June quarter, from 16.5% a year earlier, as raw material costs surged on the West Asia war and German partner Henkel AG…
The Story in Brief
Jyothy Labs' operating margin nearly halved to 8.4% in the April-June quarter, from 16.5% a year earlier, as raw material costs surged on the West Asia war and German partner Henkel AG ended a 15-year licensing deal for Pril and Fa brands in May. The Ujala maker's net profit fell to Rs 47.6 crore from Rs 96.8 crore.
Revenue rose 3% to Rs 773 crore. Excluding Pril and Fa, value growth was 8.1% and volume growth 5.3%. Chairperson M.R. Jyothy said price hikes were not enough to offset inflation, with relief expected only from October. The company expects double-digit growth in FY27, excluding Pril. JM Financial downgraded the stock to Reduce with a target of Rs 205.
The Indian Opinion
The market narrative that Jyothy Labs is a victim of external shocks is only half true. Henkel's exit was known for months, yet the company took its eye off margin protection. Crude-linked costs are real, but peers absorbed them better. Blaming the war dodges the core question: why was a 4-4.5% hike so slow in coming? Watch whether Pril's replacement, Exo, can reclaim the 13% dishwash market share, or the next quarter will show it cannot. That number, not the oil price, decides this story.
Sources (2): livemint.com, thehindubusinessline.com
This story was synthesised by AI from the 2 sources linked above.
Updated: this story now draws on 2 sources.
