Concall Summary: Jyothy Labs Q4FY20

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Business overview

  • Revenue at Rs 393 crores vs Rs 516 crores YoY
  • Gross Margin at 45.7% vs 45.2% YoY
  • EBITDA margin at 10.3% vs 15.8% YoY
  • PAT at Rs 27 crores vs Rs 67 crores YoY

Participants

  • IIFL Securities
  • Investec
  • Macquarie
  • Spark Capital
  • Sharekhan
  • Antique Stock Broking
  • Centrum Capital

Concall Highlights

  • Jyothy Labs Ltd (JLL) has reported positive growth in April and May 2020
  • The manufacturing operation is back to 80% of the pre-COVID level; all state depots are open. JLL was at 40-50% capacity at the end of April
  • JLL has partnered with alternate distribution companies – JumboTail, Udaan, ElasticRun, etc and last-mile delivery partners like Dunnzo, Zomato, and Swiggy
  • The company launched ‘DISTIMAN’ retailer mobile app to facilitate orders directly from retailers to distributors
  • JLL produce 80% of goods from its own manufacturing plants and the sales force is on direct payroll
  • Fixed employee costs adversely impacted EBITDA by 2.5% and media cost which was pre-committed has adversely impacted EBITDA by 2.8%
  • JLL will launch Ujala Crisp and Shine in nearby states of Kerala
  • Household Insecticide (HI) sales have seen a good pick up in the month of April and May; market share has increased in the last few quarters 
  • Company has launched Margo hand sanitizer in just 21 days and currently is in strong demand; JLL has also launched hand wash early this quarter
  • JLL has witnessed some dip in Ujala fabric whitener as people are not going out as much
  • 40-50% of raw material cost is linked to crude oil prices
  • Demand for Household Insecticides has been very good this year as people are very cautious and the season has been extended by 3-4 weeks
  • Exo anti-bacterial dish wash has done well
  • In the personal care segment, Margo has done very well in the last two months
  • Secondary sales are doing much better than primary sales
  • GT is doing fine; 85-90% distributors are back. Modern trade is also picking up
  • Company has guided 15-16% EBITDA margin for FY21
  • Demand for lower unit packs (LUP) has increased. The contribution of LUP in the overall portfolio is around 25%.
  • LUP helping the company to gain market share in certain markets
  • T-Shine is currently available only in Kerala and the company is planning to take it to nearby states.
  • The company has changed the packaging and new communication has also gone on air.  
  • JLL has already launched T-Shine floor cleaner in nearby states
  • Ujala fabric whitener is available at 3 million retail outlet and direct reach is around 8.5 lakh retail outlet
  • When JLL bought Margo brand, it was a Rs 40 crore brand, now it is around a Rs 200 crore brand
  • 20% of business from modern trade and CSD; credit period for modern trade is around 20-30 days and for CSD it is around 60 days but due to COVID, credit period gets stretched for CSD
Also Read on FinMedium:  Concall Summary: Emami Q4FY20

Image source: Company website

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Karan Sharma
The Concall Summary Guy | CFA | Investor
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