Jyothy Labs Q3 net profit declines 28% yoy at Rs38cr; Stock under pressure

21 Jan 2022 , 03:31 PM

Jyothy Labs Limited, one of the leading Indian FMCG companies announced today its financial results for the quarter ended December 31, 2021. The company delivered sales of Rs539cr in Q3FY22, increase of 13.1% value growth against Rs476.62cr during the same period last year. Two-year CAGR growth of 13.2%.

Net Profit of the company fell 28.5% yoy at Rs38cr in Q3FY22 versus Rs53cr in Q3FY21. EBITDA at Rs61.2cr (11.3% to net sales) versus Rs79.8cr (16.7% to net sales)

The quarter has witnessed mixed consumer sentiment with normalisation of economy inspite of ongoing pandemic affecting day-to-day lives, however, higher inflation has adversely impacted the monthly household budgets of the consumers.

“The Company continues to deliver good results backed by recovery across all channels and categories. We will continue to grow the market backed by distribution and digital expansion and product innovation initiatives. We constantly focus on strengthening our go-to-market (GTM) across all channels including urban and rural areas which has resulted in double-digit growth for the quarter and as well as on a 2-year CAGR basis,” the company said in a filing on Friday.

The higher raw material input costs have impacted the margins which have been partially managed with calibrated price hikes and persistent cost rationalization measures. The company continues to focus on technology-led distribution and improve productivity in all spheres of business to maintain a balance between higher volume growth, market share and margins.

Inspite of pressure on margins, we have focused on promotional activities and judicious media spends to support full business potential of our brands and distribution and expect significant benefits in future to enhance long term shareholder value.

Segment Performance
Fabric Care - Fabric Whitener, Fabric Enhancer, Bar Soap and Detergent Powder.
Fabric Care sales increased by 18.8% for Q3FY22 over same period last year. The segment has seen improvement in sales across all brands with acceleration in sales at Modern Trade and Canteen Store Department. Further, post wash segment have seen sequential improvement every month and has reached pre-covid levels.

Dishwashing - Dish Wash Bar, Liquid, Gel, Powder and Scrubbers.
Dishwashing sales increased by 10.4% for Q3FY22. The growth is supported by good momentum backed by greater emphasis on hygiene and strong distribution focus across all channels. Further, smaller SKUs continues to gain acceptance and are selling strong in rural markets thereby thrusting growth in revenues and individual brand trajectory.

Household Insecticides - Mosquito Repellent Coil, Incense Sticks and Liquid Vaporizer.
Household Insecticides sales increased by 9.8% for Q3FY22. The sales were satisfactory as consumers adopt a preventive approach towards health. We continue to focus on Liquid format with our ‘Fit all Machines’ Liquid Vaporiser Bottle highlighting its unique offerings which has been consistently gaining market share.

Personal Care - Body Soap, Face Wash, Hand Wash, Sanitizer and Toothpaste.
Personal Care Sales have been flat for Q3FY22 over same period last year, however grew by 21.9% on a 2 year CAGR basis. Our Neem based Margo portfolio of Soaps, Handwash, etc continues to be consumer preference as these products are made from natural ingredients.

MR Jyothy, Managing Director, Jyothy Labs Limited said, “We have been consistently delivering double digit growth for last few quarters backed
by our relentless focus on execution to build scale with agility which has resulted in market share gains across categories.

This has been achieved inspite of challenging higher input price environment resulting into increase in retail prices which impacts consumers purchasing power. While we continue to face margin pressure, we will focus on our strategic levers to offer better value proposition to consumers and focus on distribution which will aid in accelerating us towards higher revenue growth’’

Towards close of trade on Friday, Jyothy Labs Ltd was trading at Rs140 per piece down by Rs0.6 or 0.43% from its previous closing of Rs140.60 per piece on the BSE.