Analyst Meet / AGM     19-May-17
Analyst Meet
Jyothy Laboratories
See margins expanding in FY18
Jyothy Laboratories (JLL) held analyst meet to discuss the results for the quarter and year ended March 2017.

Highlights of the meet:

For Q4, Sales growth of 4%. Volume grew by 5%. Sales growth excluding Household Insecticides of 7%. Volume grew by 10% EBITDA Margins at 13.1% v/s 13.4% in Q4 FY 16.

For FY17, Sales growth of 5.4%. Volume grew by 7% by volume. Sales growth excluding Household Insecticides of 7.8%. Volume grew by 9.4%. EBITDA Margins at 14.7% v/s 14.4% in FY 16.

For Q4, fabric care sales grew by 8% to Rs 182 crore, dishwashing grew by 4% to Rs 120 crore, personal care grew by 22% to Rs 33 crore while household insecticide de-grew by 6.5% to Rs 111 crore.

For Q4 brand wise sales, Ujala grew by 10% to Rs 102 crore, Exo by 3% to Rs 90 crore, Margo by 19% to Rs 28.9 crore and Pril by 2% to Rs 30 crore, while Maxo declined by 6% to Rs 111 crore and Henko by 3% to Rs 44 crore.

JCPML (Formerly Henkel India Marketing Limited) has been merged with JLL. All the Assets and Liabilities of JCPML have been recorded at their carrying value. Due to Merger of JCPML deferred tax assets/MAT Credit on brought forward losses has been recognised in FY17 – Rs 92 crore (balance carried forward losses Rs 83 crore).

Successfully commenced the commercial production of Ujala Fabric Whitener, Margo Soap & Maxo Liquid Vaporiser in FY 2017 at Guwahati (North Eastern State). These manufacturing units are entitled to avail the 100% income tax benefit u/s 80 IE for next 9 years. For 5 years, no need of increase of production capacity for these products.

Overall demand scenario remains muted. Aggressive promotion by competitors to drive growth. Q3 impacted by Demonetization. Overall demand back to pre demonetization period. Wholesale channel operation normalized barring few areas

Price increases to neutralize rising Input costs affected in Q4 FY 17.

For Q4, Uajal Supreme grew 4% to Rs 57.77 crore, Ujala Crisp and Shine by 37% to Rs 18 crore.

Ujala Crisp & Shine re-staged with a strengthened and differentiated proposition. Brand has registered 29% growth in FY'17 in Kerala - highest ever growth registered in the last 3years. Ujala Crisp & Shine contributed to delivering nearly 7% overall franchise growth in post wash

Ujala Detergent grew 9% to Rs 25 crore. Exo Dish wash bar grew 5% to Rs 67.53 crore. Scrubber de-grew 5% to Rs 20 crore. Pril grew by 2% to Rs 22 crore.

Maxo coil de-grown by 7% to Rs 689 crore. Maxo LV grew 11% to Rs 35.8 crore. Maxo card de-grew by 47% to Rs 5 crore.

Power brand sales grew 4.4% by value and 6.1% by volumes

The company launched Maxo Genius, rejuvenated Ujala Crisp & Shine and also restaged the brand Margo in FY17.

The mgmt believes Ujala Crisp & Shine could be big driver. The product was first launched only in Kerala and has just launched in the state of Tamil Nadu. In FY18, company will take the product to 1-2 more states. After wards will have pan India launch.

Price hike (grammage reduction + MRP hike) was 7-8% in Exo portfolio in Q4FY17. Price hike was 8-10% in Ujala portfolio in Q1 FY18.

In FY17, 35-40% of the total sales came from the wholesale channel. Wholesale channel in North and East of India not yet normalized from demon impact

The company will now plan sales efforts district wise. All identified districts nationally (all zones) will have a district in charge and their target will be set as per the potential of the district. Company is aiming to bring all towns above 10k population under direct coverage by end of FY18.

They currently have a direct reach of 800k stores and 20 lakh indirect reach.

Indirect tax incidence is 20% currently.

Company is targeting GDP plus 4% volume growth in FY18. Volume growth can be 12% and EBIDTA margin can be 15% if GST and monsoon is normal.

No more investment in laundry business.

The company does see margins expanding in FY18.

Tax rate at MAT for FY18.

Working on 3-4 extension of Margo brand.

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