Jyothy Labs

Jyothy Labs reported a consolidated revenue from operations of ₹667 crore for Q4 FY25, marking a 1.1% value growth and 4% volume growth year-on-year. For the full fiscal year 2025, the company achieved 3.3% value growth and 6.4% volume growth. The operating EBITDA margin for Q4 improved to 16.8% from 16.4% in the previous year, while the full-year EBITDA margin stood at 17.5%, up 20 bps from the prior year, with EBITDA reaching ₹500 crore.

Fabric Care grew 2.1% in Q4 and 5% for the full year, primarily driven by liquid detergents, which saw revenues nearly triple. Ujala IDD Detergent Powder gained market share in Kerala, rising to 24.5% in FY25. Dish Wash grew 3.1% in Q4 and 3.7% for the year, with strong double-digit volume growth. However, Personal Care declined 8.8% in Q4 and 0.9% for the year, impacted by inflation and a high base, while Household Insecticides saw declines of 4.8% in Q4 and 6.5% for the year, with coils continuing to de-grow.

Gross margin for Q4 FY25 was 49.2%, a 30 bps decline year-on-year, reflecting continued input cost pressures. For the full year, gross margin improved by 100 bps to 50.1%. Management noted an upward trend in key raw material prices such as LABSA, soap noodles, and SLES. Despite these pressures, operating EBITDA margin improved due to prudent cost management. The company plans to calibrate pricing based on future market trends and costs.

The company is focused on launching more affordable formats, filling portfolio white spaces, and deepening presence in core regions. Recent product additions include Maxo-Aerosol and Maxo Electric Racquet in Household Insecticides, and Ujala Fabric Conditioner (Ujala Young & Fresh) in Fabric Care. Initial feedback for Ujala Young & Fresh has been positive, particularly in the South, and management has high hopes for its future trajectory. Efforts are also underway to revitalize the Margo franchise in Personal Care.

Working capital increased in FY25, with the net working capital cycle standing at 18 days as of March end, up from 5 days previously. This increase was attributed to higher inventory, receivables, a growing share of modern trade and institutional business, and elevated raw material prices. Despite this, the company remains debt-free and maintains a robust cash balance exceeding ₹750 crore, which the board is considering for future organic and inorganic growth opportunities.

Jyothy Labs divested its 75% stake in overseas subsidiary Jyothy Kallol Bangladesh Limited (JKBL) to its JV partner, Kallol Enterprise Limited, for a consideration of ₹2.1 crore. This decision was made after more than a decade of efforts, as JKBL had not yielded desired results and stretched management bandwidth. The transaction resulted in a loss of approximately ₹4 crore, recorded under exceptional item^📎s for Q4 and FY25.

Management expects FY26 to be a year of two halves, with the first half likely to be difficult due to demand softness and ongoing competitive intensity. They anticipate mid-single-digit volume growth in H1, followed by double-digit growth in H2, driven by demand recovery and the full impact of price increases. The company aims to maintain an EBITDA margin of 16-17% and an effective tax rate of 23-24% in the next year, with ad spend remaining at 8.5-9% of revenue.