Jyothy Labs Q3FY24 Concall Summary
A) Financial Highlights
Net sales up by 10.6% (lower than volume growth due to price correction) value growth. Volume growth is 11%
EBITDA margin stands at 17.5%
net profit up by y 34.9% for the quarter
Input prices stabilized, therefore sustained margin
B) Key categories performance
Fabric Care sales have increased by 11.9%, focus is also on growing the fast-growing liquid detergent category, which has also witnessed good results.
In Dish wash, sales have increased by 6.7%
Household Insecticide category, sales increased by 5.4%
Personal Care segment, sales have increased by 22.3%, Margo neem, rose, lemon, jasmine, got good response from consumers
C) Strategy (focusing more on volume growth)
1st - increase direct distribution
2nd - focusing on several digital advertising like out-of-home, van operations, newspaper ads for
each brand to reach out to the end consumer
3rd - New Products launches like liquid detergent in Henko and Ujala, new launches of Margo variant
D) Challenges:
The rural economy not picking up
Input price risk (if stable can this yr can earn 16-17% EBITDA margins)
E) Q&A
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Targeting in 4 yrs at CAGR of 19% but too rosy expect 5-6 yrs or top 12-15% CAGR.
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Focusing more on organic growth and less on M&A
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HPC (Health & Personal Care), open for shampoos or home and personal care
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Henko & Mr White focusing on geographical expansion & in-state growth.
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Once Rural economy picks in can expect more volume growth in Dish Wash Segment.
Key raw materials used by Jyothy labs —> LABSA, Soda Ash, Palm Oil, etc -
1.1 million outlets reach on a direct basis, by next FY to add 75 k to 100k more shops.
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Targeting 8-9% of sales as ads spent
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Once they add a retail shop it takes 12-24 months to show in the expected results (optimum sales target).
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To increase distribution they need to hire more which means more employee cost. (in next concall can ask for volume growth guidance for FY25)
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Ecom is 5-6% of topline, liquids do better in e-com, liquid detergent (online & offline) not a major part of wash portfolio, focusing more on the liquid detergent side.
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distribution reach still has more legs to grow under for Margo
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currently 23 plants, no plan for adding new as of now, means no major capex, expected maintenance capex of 40 Cr this yr
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In the near future can do price cut to tackle competitors thereby short term margin impact.
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