Physical Address
Bengaluru, Karnataka
Table of Contents
Before we begin with the analysis of Jyothy Labs, we would say one thing: this business model is simple to understand, but it requires a lot of hark work to beat the competition in this sector. FMCG is by far the most competitive sector in the investment universe. There are multinational giants, homegrown behemoths and new-age startups to deal with in a market which is highly price sensitive.
About the company
Jyothy Labs was founded in 1983 by Mr. M.P. Ramachandran as a proprietary concern selling fabric whitener in Kerala, It started with just one brand, Ujala Supreme. Ujala was a game changer as the existing indigo based fabric whitening powders, more often than not, left stains on light coloured clothes. The first factory was setup in Chennai by Jyothy Labs to manufacture Ujala in 1992. When Ujala Supreme was launched across India, it became a sensation and quickly became a household name. Soon, Jyothy Labs launched other products across segments.
Jyothy Labs continues to apply one particular strategy while launching a product; it launches the product in one state or region, studies the consumer behaviour for a certain period, then, if successful, launches the product throughout India. The company was listed on the exchanges in 2007. In 2011 the company bought controlling stakes in Henkel India, the Indian arm of the German FMCG multinational Henkel. In this analysis of Jyothy Labs we will know more about the company.
Shareholding Pattern and Management
The Shareholders
The promoters of the company hold 62.89% of the outstanding shares. Remaining 37.11% of the shares are held by public shareholders. There are 14 shareholders in the promoter group. The promoter of the company, Mr. M.P. Ramachandran holds 39.12% of shares.
Mutual Funds held 13.76% shares at the end of Q1FY25. Among the mutual funds, the top four shareholders were:
- Franklin India Flexi Cap Fund
- Nippon India Small Cap Fund
- Canara Robeco Flexi Cap Fund
- Mirae Asset Great Consumer Fund
Individual investors held 6.34% of the outstanding shares. Foreign Portfolio Investors held 15.10% of shares in the company.
Jyothi Labs Shareholding
The Management
The company is led by Ms. Jyothy Ramachandran, Managing Director and Chairperson, who is mentored by the Chairman Emeritus, Mr. M.P. Ramachandran. Ms. Jyothy Ramachandran holds an MBA degree from Welingkar Institute of Management and Research in Mumbai. She had joined the marketing team of the company in 2005 and became the Chief Marketing Officer in 2017. Ms. Jyothy Ramachandran was appointed as the Managing Director of the company in April 2020.
The management team also consists of Mr. Ananth Rao T, Director-Operations and Commercials, Mr. Sanjay Agarwal, Chief Financial Officer and Mr. Ravi Razdan, Director-IT and HR.
Jyothy Labs Products
The company’s portfolio of products is a mix of in-house developed products and Henkle’s proprietary products. The segments in which Jyothy Labs primarily deals are:
- Fabric Care
- Ujala
- Henko
- Mr. White
- More Light
- Dishwashing
- Exo
- Pril
- Home Care
- Maxo (Mosquito Repellant)
- T-Shine (Surface Cleaner)
- Maya (incense sticks)
- Personal Care
- Margo (Soap)
- Neem Activ (Tooth Paste)
- Fa (Deodorant, After Shave and Talc)
The Business and the Reach
As the Indian middle-class is growing, so is the prospects of Jyothy Labs. As per Nielsen’s March 2024 report on the FMCG sector, the Urban market will continue to provide thrust to the FMCG sector, but the Rural market won’t be far behind. The FMCG companies have penetrated deep into the Rural markets through better marketing and developing robust supply chain. Another aspect that the Nielsen report indicated was that the FMCG companies utilizing the consumer data in a much better way by leveraging big data to understand consumer behaviour and preferences. The report further indicated that the non-food FMCG product segment was growing at a much higher rate than the food FMCG.
As-of Q4FY24, the products of Jyothy Labs were present in 2.8 million outlets. The company has direct reach to 1.2 million outlets through its distribution channels. Jyothy Labs has more than 9,900 channel partners. The company has 23 state-of-the-art plants across India. Ujala Supreme has a market share of 84% in the fabric whitener category. Exo and Pril are placed second, in value terms, in the Dishwash bar and Dishwash liquid categories, respectively. Both Exo and Pril have 13.7% market share in their respective categories. Maxo is placed second in Mosquito Repellant segment in volume terms. Maxo coil has a market share of 23.8% in the mosquito coil category.
The company is focusing on marketing to popularize its brands.
Jyothy Labs has 43% market share in the Fabric Care category and 34% share in the Dishwashing category.
The company had a total of 8,132 permanent and non-permanent employees as on March 31, 2024. 60% of the employees have been with the company for at least 5 years and 40% of the employees have been with the company for 15 years or more.
Financials of Jyothy Labs
The company has a ROE of 20.42% and the TTM PE of 49.30. The Price to Book Value ratio stands at 10.07. The company had no debt in its books and had a reserve of ₹1,770 crore. Jyothy Labs had Cash and cash equivalents of ₹84.39 crore and bank balances of ₹81.66 crore at the end of Q4FY24. Current ratio was at 2.37 and the dividend yield was 2.01%. The consolidated Revenue for FY23-24 was ₹2,756.93 crore and PAT was ₹369.3 crore. The net profit margin was about 13%.
The Jyothy Labs stock has given a return of 108.92% and 186% in the last 1 year and 2 years, respectively.
If we take a look at the financials of the company since Q4FY22, then we find that the revenue in Q4FY24 has grown by just 21% over the revenue of Q4FY22, but the EBITDA and PAT have increased significantly. The EBITDA has jumped by over 89% in Q4FY25 over Q4FY22. The PAT for Q4FY24 has increased by 112% over PAT for Q4FY22.
The company has shown tremendous growth in the last two years. The results for Q1FY25 are eagerly awaited to see if the company is able to maintain a healthy growth rate. There is immense scope for growth as the company is into only a few categories of FMCG. There are a few products which haven’t yet been launched across the country. The company is looking into both organic and inorganic growth opportunities. The company is also looking into eCommerce opportunities and focusing on the use of technologies to expand the brands.
We have analyzed other companies too. An article on ITC can be found here and an article on Mahindra & Mahindra can be read here. Please do give us a your feedback on our analysis of Jyothy Labs.
References
- Jyothy Labs Annual Report for FY23-24
- Jyothy Labs website
- How MR Jyothy hopes to make Jyothy Labs a Rs 5,000 crore company, Forbes article on Jyoth Labs
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