Jyothy Labs zooms 19% on strong operational performance in June quarter

Shares of Jyothy Labs zoomed 19 per cent to hit a record high of Rs 289.25 on the BSE in Tuesday’s intra-day trade in an otherwise subdued market after the company reported a strong operational performance for the June quarter (Q1FY24).

The company’s earnings before interest, taxes, depreciation, and amortization (EBITDA) margins for the quarter improved 710 bps to 17.1 per cent against 10 per cent in a year ago quarter, due to moderating input costs. Net profit more-than-doubled or was up 101.7 per cent year-on-year (YoY) at Rs 96.3 crore from Rs 47.7 crore in Q1FY23.

At 12:02 PM; the stock quoted 17 per cent higher at Rs 282.65, as compared to 0.10 per cent decline in the S&P BSE Sensex. The average trading volume at the counter jumped over 10-fold so far. A combined 13.2 million shares had changed hands on the NSE and BSE.

The management said, with rising disposable income of discerning and aspirational consumers, the company’s efforts are towards increasing engagement with consumers, expanding its sales and distribution network, focus on relevant innovations thereby strengthening core business.

Net sales grew 15.1 per cent YoY at Rs 687 crore. The company has delivered a consistent double digit revenue growth for the last few years and rise in its brands market share. This is coupled with healthy cash position empowering future growth, the management said.

Jyothy Labs is one of the leading Indian fast moving consumer goods (FMCG) Companies with a single brand ‘Ujala’ which has evolved into a multi brand. The company involved in the manufacturing and marketing of products in fabric care, dishwash, household insecticide and personal care.

The company has leading brands like Ujala, Maxo, Exo, Henko, Pril, Margo, Mr. White, T-Shine, Neem, Maya and MoreLight that are well-known and established brands in their respective categories.

Jyothy Labs has been concentrating its efforts on accelerating growth through distribution drives. In addition, it is developing a category penetration strategy, extensively digitising its operations, and increasing its focus on premiumisation.

FMCG sector is expected to see significant growth in FY 2023-24, as rural demand is expected to improve and inflation gradually begins to moderate, with urban demand continuing to remain steady. According to Statista.com, the Indian FMCG industry is projected to grow at a CAGR of 14.9% from US$ 110 billion in 2020 to US$ 220 billion in 2025 and to US$ 615 billion by 2027. Recently, consumer’s buying trends have been significantly affected by the growth of social media. Social media influencers may assist firms in retaining customers, ultimately contributing to sector-wide sales growth, Jyothy Labs said in its FY23 annual report.