In an interview to CNBC-TV18, K Ullas Kamath, Joint MD & CFO of Jyothy Laboratories spoke about their second quarter numbers.
Below is the verbatim transcript of K Ullas Kamath’s interview with Sumaira Abidi & Nigel D'Souza.
Sumaira: I want to actually start off by talking about the bulk of your business which is soaps and detergents, there we have seen about 7 percent revenue growth. Can you take us through what the volumes look like over here?
A: As you rightly said that it is a good set of numbers and entire growth has come from the volume. The soaps and detergents is about 8 percent and homecare is about 16 percent. However, entire 9 percent growth that we have got for the quarter is purely on volume.
Nigel: I was just looking at some of your competitors. They have taken some price cuts as well what I believed. Are pricing cuts in the offing such that you can maintain your volumes going ahead. Is there any pressure on pricing?
A: No, our most of the products are differentiated products and are positioned differently. We are not taking the price cut as a competition. We are still working with the same pricing and we are getting the volume growth. However, 9 percent volume growth is a shade less than what we wanted to achieve, 10 percent. The EBITDA looks very healthy at 13.8 percent compared to 10 percent odd similar period last time. Overall for the half year EBITDA at 15.2 percent, we are extremely happy and because we are getting volume growth as well, we continue to do the similar way in the coming quarters as well.
Sumaira: Your gross margins this time have passed 51 percent mark. Is this sustainable given that a price hike may not be possible?
A: In fact because of the crude price coming down our overall improvement in gross margins were about 5 percent odd. We have passed on about 2 percent to the consumer in sales promotion. Net we have retained about 3.4 percent, we have retained in the company and that is gone to 51.4 percent from 48 percent odd. We are able to sustain the growth at this level and hopefully we should be able to do that in the coming two quarters also and we don’t see any pressure on that.
Nigel: Ujala is the big brand from your basket. What is the volume over there? How much does it contribute to your total sales? Could you give us some details particularly on Ujala?
A: Ujala, we have gone on new campaign and it has given us double digit growth in the current quarter. I hope that we will be able to sustain that growth in the coming quarters also. As we have more than 75 percent market share, there is no competition as such so we should be able to do that. As you right said that is a flagship brand of Jyothy and doing very well.
Nigel: Is there any market share loss that you are perceiving going ahead or do you believe you can hold on to your market share across various brands?
A: All the products and segments in which we are, we have garnered the market share in the last quarter because we have grown much more than the industry. Technically, we should have gained the market share. We will get the report by the end of this month and we should have got the market share in all the segments in which we are present. So, there is no market share loss as such, there will be a gain.
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