Jyothy Labs — Q1 FY26 earnings call

So, we have indicated in the past that we are actively working towards turning around this category, household insecticides, and we have taken certain measures. And there are a few which are in pipeline. We have launched new products also, aerosol and racquets in the previous quarter, and we have taken some price increases in coils. So, there's a lot of action which is happening in order to improve the performance of this category. We have also indicated in the past that we are hopeful that in next year FY'27, we will be able to turn around this category and necessary steps are being taken in that direction. So, as of now, there is no intention to sell or divest this particular line of business of the Company.

Analyst questioned the sustainability of losses in the HI segment, and management provided a clear timeline (H2 FY27) for achieving profitability and confirmed no divestment plans, indicating strategic commitment.

Asked by Sonal Minhas

So, Sonal, largely this softness in demand, when we say it is moving from traditional trade to modern trade and your e-commerce and largely e-commerce and your quick commerce gaining bigger traction, which we are also seeing internally in the Company. We are growing at double digits there. But not all of it is getting converted. Basically, ideally, it should have been that all of it, which is your general trade and modern trade, all of them grow. And this should be ideally a top-up. But consumers are seeking convenience and more and more we see traditional outlets lose out on business or are not able to generate that kind of sales, some of them even closing down. So, that's the kind of thing when we are saying more urban thing where these quick commerce and e-commerce exist. That's where we are seeing that shift. While for us, rural seems to be okay. So, this is what we are seeing. There's nothing in relation to credit or anything of that sort.

Management clarified that urban demand softness is primarily due to a channel shift towards modern trade and e-commerce for convenience, rather than credit issues or reduced consumption, which is crucial for understanding market dynamics.

Asked by Sonal Minhas

So, Manoj, competitive activity, when we say it's not restricted to one category, it is there across. It's a very, the category that we are in is highly competitive, every segment, every new category or new launch, everything are facing that kind of a thing. And rightly so, with so many players coming in, and trying to make good or trying to revive that consumer sentiments, trying to create more volume related purchases, trying to woo the consumers, I think all of them are being competitive, and which is what maybe is required for the current environment and that is, and we are also accordingly calibrating, whether be it the grammage, be it the price, price cuts or offering of promos. So, it's a combination of all of this, it's not one category alone, it is there across. And I think that this whole thing, when everybody does it, basically, the consumer sentiments will be better going forward maybe it will result in more of volume uplift going forward. Yes, but being in Home Care, yes, it's a very, very competitive segment. And it looks like that will remain going ahead. But we are trying our best to see, to bring in relevance and to bring in the best quality to the consumers at a good price.

Management acknowledged pervasive competitive intensity across all segments, including Home Care, and outlined strategies involving grammage, pricing, and promotions to navigate this environment, highlighting the need for agility.

Asked by Manoj Menon

Yes. So, we are in pursuit of finding the right fit, and in that regard we are evaluating few assets and at an appropriate time, the information will be shared with the investor community.

The company confirmed it is actively evaluating M&A opportunities and pursuing the 'right fit', indicating potential future growth avenues beyond organic expansion, though specific details remain undisclosed.

Asked by Vishal

See, it's very, very volatile situation right now. As you know, as you are aware, the liquid detergent, the way margins are fluctuating and the competitive intensity is there. Right now, these quarters margins are lower compared to last year. But I think this year, looking at the current situation and next few quarters, the visibility that we have and the sense that we are getting from the market, the margins will be slightly lower compared to FY'25.

Management provided a clear outlook that Fabric care margins for the current year (FY26) are expected to be slightly lower than FY25 due to volatility and competitive intensity, setting investor expectations.

Asked by Vishal

So, in general trade, we have largely cash and carry business in most regions of the country. But in modern trade, we extend credit and it varies. Again, the terms of trade are negotiated, discussed with individual players. So, it's very difficult to give you the sense. But we do extend credit to modern trade e-commerce, quick commerce players. So, that's all I can tell you. ... No, it varies. Again, retail chains, e-commerce platform, quick commerce platform, cash and carry outlets. So, it's institutions, it's a mix. So, overall, we can say a basket approach if you see about 30-35 days credit.

Management clarified the credit terms for different trade channels, indicating a mix of cash-and-carry for general trade and extended credit (around 30-35 days on average) for modern/quick commerce, which impacts working capital.

Asked by Sonal Minhas

No, these are the usual suspects. ... At least we have not seen that.

Management indicated that they have not observed new D2C brands significantly disrupting the top 2-3 players in e-commerce/quick commerce for their categories, suggesting established brands maintain dominance in these channels.

Asked by Sonal Minhas