Ladies and gentlemen, good day and welcome to the Q4 and FY25 earnings conference call of Jyothy Labs Limited, hosted by ICICI Securities Limited. As a reminder, all participant lines will be in the listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star, then zero on your touch-tone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Dheeraj Mistry from ICICI Securities Limited. Thank you, and over to you, sir.
Thank you, and welcome to the call. I would like to thank the management of Jyothy Labs to give us an opportunity to host this call. From the management, we have with us Ms. M.R. Jyothy, Chairperson and MD, Mr. Pawan Agarwal, CFO. I would hand over the call to the management for their opening remarks. Thank you.
Good afternoon, everyone, and a warm welcome to Jyothy Labs Limited Q4 FY25 earnings. The complete financial results and investor presentation are available on our website as well as on the stock exchanges. I hope you have had the opportunity to review them. FY25 has been a challenging year, not just for us but for the broader FMCG industry. After four consecutive years of double-digit value growth, we saw a slowdown beginning in Q2, driven largely by external headwinds: rising living costs, sluggish urban income growth, and evolving consumer preference towards daily essentials in terms of pack sizes, price sensitivity, promotional offers, and convenience of ordering and delivery. While India's macroeconomic indicators remain strong relative to global peers, urban households are clearly feeling the pinch. Higher spends on housing, healthcare, education, and utilities have impacted discretionary and even essential consumption.
Consumers are opting for smaller packs, holding back on bulk purchases, and displaying heightened price sensitivity. Rural demand has started to recover but not yet at a pace that can offset urban softness. That said, our long-term outlook remains positive. We believe this is a temporary phase, and demand will gradually recover, led by volumes. We are confident in our ability to navigate this period with resilience and emerge stronger. Our strategy remains focused: launching more affordable formats, filling portfolio white spaces, deepening our presence in core regions, and managing costs without compromising on quality. Our brands are trusted, our team is agile, and our execution is solid. Our priorities are clear: serving our consumers better, staying efficient, and creating long-term value for our investors. Let me touch upon the performance of various categories in our business.
Fabric Care grew at 2.1% in Q4 and 5% for the full year, largely led by volume. Liquid detergents were the primary growth driver, supported by detergent powders and bar soaps. The main wash category saw double-digit volume growth in FY25. In Kerala, Ujala IDD detergent powder gained market share, rising to 24.5% in FY25 from 23.4% in FY24. South India market, our stronghold in the liquid detergent space, grew at 27% year-on-year, with some of our brands outpacing category growth in this region. Revenues from liquids nearly tripled on both a quarterly and annual basis. The post-wash segment remains a key focus. Ujala Supreme continues its leadership, and Ujala Crisp & Shine sustained its momentum. With the recent launch of Ujala Fabric Conditioner and encouraging early feedback, we are optimistic about the post-wash category's future. Gross margins in Fabric Care are also improved year-on-year.
Dishwash grew at 3.1% in Q4 and 3.7% for the year, with strong double-digit volume growth in both bars and liquids. Despite healthy volume growth, lower average realization due to promotions markedly impacted margins during this year. Personal care faced challenges, declining 8.8% in Q4 and 0.9% for the year, impacted by inflation and a high base. Our new Jeeva beauty soap is gaining market acceptance. However, weakness in the Margo franchise weighed on overall performance this year. We have initiated focused efforts to revitalize Margo Neem Naturals and the variant through enhanced communication and visibility. While selective price hikes were taken, lower volumes and higher input costs affected gross margins in this category. With promising consumer feedback and ongoing brand efforts, we expect a better performance in FY26. Household insecticides declined 4.8% in Q4 and 6.5% for the year. However, our liquid vaporizers registered healthy volume-led double-digit profitable growth.
We are working to sustain and accelerate this momentum. Coils, a structurally declining category, continued to degrow for us as well. We are taking decisive steps to minimize near-term losses in this category and eliminate them in the medium to long term. To enhance our HI portfolio, we recently launched Maxo Aerosol and Maxo Electric Rackets. These additions move us closer to offering a complete product range and also help improve overall portfolio margins. Early market response has been positive, though these products have lower salience compared to coils and LVs. Now, I'll request our CFO, Pawan, to take us through the financial performance of the company.
Thanks, Jyothy, and a very good afternoon to all of you. For the quarter-end date 31st March 2025, consolidated revenue from operations stood at 667 crore, a 1.1% value growth and 4% volume growth year-on-year. The gap between volume and value growth is due to higher grammages and promotional price ups in select categories. Gross margin for quarter four was 49.2%, down 30 basis points YOY, reflecting continued input cost pressures. We implemented selective price increases in Fabric Care, Personal Care, and HI segments during the quarter and will calibrate pricing based on future market trends and cost trends. Advertising and sales promotion spends were at 8% in quarter four, slightly lower year-on-year, calibrated in response to macroeconomic conditions. However, our commitment to long-term brand building remains intact, as reflected in our annual A&P spends.
Operating EBITDA margin for quarter four improved to 16.8% from 16.4% last year, aided by prudent cost management despite the input cost advancement. For the full year FY25, we delivered 3.3% value growth and 6.4% volume growth. Fabric Care and dishwash segments grew in both value and volume, while HI and Personal Care revenues saw declines of 6.5% and 0.9% respectively. Gross margin improved by 100 basis points to 50.1%. A&P spend was 8.4% of revenue versus 8.3% last year. Other expenses rose marginally by 20 basis points to 12.7%. EBITDA grew from INR 480 crore to INR 500 crore, with a margin improvement of 20 basis points to 17.5%. PAT rose marginally to a little over INR 370 crore. The effective tax rate for quarter four was 22.4% without considering the tax related to earlier periods.
On a full-year basis, the effective tax rate was nearly 23% without considering the tax related to earlier periods, slightly higher than the last year's 22%. We expect ETR to remain in the range of 23%-24% in the next year as well. Working capital increased in FY25 due to higher inventory and receivables, partly driven by elevated raw material prices, growing share of modern trade and institutional business in total revenue, and a strategic move to address evolving market needs. As a result, our net working capital cycle stood at 18 days as of March end. We continue to remain debt-free with a robust cash balance of exceeding INR 750 crore. Now, let me briefly touch upon the divestment of our stake in overseas subsidiary that is Jyothy Kallol Bangladesh Limited, JKBL. Our decision to divest our 75% stake in JKBL, subject to regulatory approvals, was taken after careful consideration.
Despite more than a decade of efforts, JKBL has not yielded the desired results and has stretched management bandwidth without proportionate returns. With stronger opportunities within India and in export markets such as Middle East and Southeast Asia, the board found it prudent to sell our stake to our JV partner, Kallol Enterprises Limited, for a consideration of INR 2.1 crore. This transaction has led to a loss of around INR 4 crore, which is shown under the head exceptional items in quarter four as well as in FY25. So, March 25, 2025 onwards, JKBL is no longer the subsidiary of the company. The board has recommended a final dividend of INR 3.5 per share for FY25 after reviewing our cash generation, dividend track record, and future growth prospects, both organic and inorganic. Last but not the least, I would like to thank you for your continued trust and support.
We remain focused on delivering consistent, sustainable, profitable, and capital-efficient growth and long-term value creation. With this, I conclude my opening remarks, and we'll be happy to answer any questions. Thank you.
Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their touch-tone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Vishal Gutka from ASK Investment Managers. Please go ahead.
Great. Hi, team. A couple of questions from my side. I just wanted to check on liquid detergents. First question, a very basic question. What is the contribution of detergent liquids to overall fabric care? Because you're tripling the sales now, if we can just quantify the amount or percentage terms. Second question was on what I gathered from my channel insights has suggested that it is very much cheaper to set up a liquid detergent unit versus setting up a powder unit. Whether this is true or not, I want to add your insights on the same. And third question is on the More Light brand. So, More Light, historically, it has been a PTL-based brand. What do you see in terms of Godrej Fab, where because of mass media advertising, they've been able to create a phenomenal revenue of INR 150 crore?
Do we think there is a need to change in our strategy? If yes, given that in terms of quality, I believe More Light here is similar only. So, any change in stance possible for More Light? Thank you.
Thanks, Vishal. As far as your first question is concerned, the detergent liquid, all I can tell you is that it is growing very rapidly for us quarter on quarter, year on year, for the quarter, for the year. On all the time zones, the growth has been quite impressive. But in terms of exact percentage, I'm afraid it will be difficult for us to share. As far as More Light and Fab comparison is concerned, Jyothy, would you like to stick?
Right now, we have no change in strategy. We will continue with the way it is. For us, the liquid detergents under the brand MoreLight have been doing pretty well. We'll focus on the similar strategy going forward for some more time.
What was your another question, Vishal?
I just wanted to check what I gathered from my checks is that it's much more cheaper. The CapEx required for setting up a liquid detergent plant is cheaper than setting up a detergent powder plant. Is this true or not? Just wanted to throw your thoughts on the same. And is it one of the additional reasons for increased competitive intensity in the liquid detergent space?
See, from our side, we have right now sufficient capacity for detergent liquid powder both. As far as investment required for setting up a liquid plant compared to detergent powder, I mean, I would not be able to comment upon it because we already don't have the need, and we have not looked into it from that perspective as of now.
But any greenfield plant, in case you have to put up, will it be cheaper or will it be similar only? Nothing, there's no material difference in terms of cost.
More or less should be similar, but as I said, we did not face that situation, so we have not evaluated in that sense.
Got it. Got it. And just last question on HI. So, I think HI has made approximately INR 25 crore losses at EBIT level in FY25. I got your statement that increasing salience of liquids will help to improve the overall profitability. Can we expect breakeven in 26, or it will be difficult?
So, as we indicated in our opening remarks also, our focus, our strategy is to move. As far as coil is concerned, it's a declining category, and obviously, within that, we are trying our best, whatever best we can do. But at least the objective is that we shouldn't be losing money over there. So, we have already taken a number of initiatives inside the company, and the early signs are visible. Green shoots are visible in coil. LV, we are supporting, and we are aggressively promoting the LV category, both on the A&P side as well as the market schemes, etc. So, LV is profitable. It is growing handsomely for us, and this growth momentum is likely to continue going forward. So, at a portfolio level, HI, I think FY26 should be better compared to FY25.
And the losses, as you rightly pointed out, already you can see at the segmental margin level, segmental profit level, already the INR 9, INR 9.5 crore loss reduction is visible this year.
Right. Right. Great. Wishing you all the best, team. Thank you.
Thank you, Vishal.
Thank you. We will take our next question from the line of Percy Panthaki from IIFL Securities. Please go ahead.
Hi, ma'am. First question is on ad spend. There's a reduction YOY this quarter. So, what are your thoughts? Because typically, even in periods of extreme inflation, unlike other FMCG companies, we have not cut our ad spend. We have suffered in terms of EBITDA margin in the short run. But then, when the input costs have come down, we have sort of recovered that. So, that has been our strategy in the past. But this quarter, we see a cut. So, is it just I'm reading too much into a one-quarter number? What's the way going ahead? And for FY26, ad spend to sales ratio, what are you planning to target?
You're right. I think for quarter four, you should not take it as any precedent. I mean, this is one of those quarters where we have to recalibrate some of things. But overall, directionally, 8.5%-9% is what we continue to invest behind our brands. And that trend is likely to continue in the near to medium term.
Got it. Got it. Secondly, just wanted to understand this volume-value gap of 2%-3% that we are facing. This is despite the inflationary scenario in soaps. So, just wanted to understand what is driving that. I understand that in detergents, yes, there has been a price cut by the market leader as well. So, there is obviously some response from your end, which is likely. But this volume-value gap is there now since a couple of quarters. I mean, even before the detergent price cuts by the market leader happened. So, what is the reason for this, and how do we look at this going ahead?
Thanks for this question. This is a great question. In the last call also, you would remember that there was a question around these lines, and I had responded that at least in the foreseeable future, there is likely to be a gap between volume and value because of competitive intensity across segments, whether it is fabric care or dishwash, extra grammages, which are being offered, promotional offers, etc. The gap between volume and value would probably settle down at this point of time, the way we see it, probably between 2%-3%. Again, it is a function of how market reacts, and accordingly, we'll have to take certain steps. This is likely to continue in the near term.
But will this not annualize? I mean, when do you see this annualizing, and therefore, on a YOY basis, it would cease to exist even if there is no further price cut?
See, in the near term, I think it is likely to be quite intense. The competition is quite intense. But eventually, I think a couple of percentage point difference between volume and value is likely to be there.
Okay. So, I'm just trying to understand where your profit growth will come from because if basically I have a negative pricing, which is sort of putting pressure on the top line, very unlikely that you will sort of do a high single-digit kind of value growth this year, which was the expectation earlier, and if you're falling short on the top line, do you think we can sort of see a margin expansion so that at least the EBITDA or EPS growth is in double digit, or you think that's probably a little too much to ask for this year?
Again, the first half of the year, I think, as of now, it's looking a bit difficult. But second half, we expect it to be better than first half. Second point is that the price increases that we have to take, the entire set of actions are not complete. We have taken some pricing price increase across categories, but the full impact is yet to be seen. So, that is going to be there. First half, obviously, there would be pressure on the top line growth as well as a little bit of stress, perhaps on the margin side, EBITDA margin. But second half, we expect the top line as well as bottom line to be better.
So, what will change in the second half?
See, demand situation, we are expecting to improve. B, some of the price increases that we are going to take, that will start showing result because it takes two months to two and a half months to get into the P&L, so these things are going to help us in terms of top line.
Right. Sir, last question from me is that, see, two, three years ago, we had taken significant company-specific initiatives. So, we had taken Exo at INR 5. We had done a big distribution expansion. We had improved the quality of the distribution. We had decided to play all four brands in the detergent space. We had launched variants of Margo. So, there was a plethora of all these initiatives taken, which gave us good growth. Now, those initiatives are a couple of years old, and the benefits from them have started to taper. So, what are the new initiatives from your side, which will drive the growth in the future?
See, you're right. A number of initiatives were taken, including the distribution expansion, which is also continuing, but obviously, the pace definitely would have to be moderated depending on the distribution expansion we have already done over the past three, four years. But while we were reaping or we are reaping the benefits of steps that we had taken in the past, simultaneously, last two years, we have been working on NPDs also. Now, you will see the launch of NPDs you have already seen in quarter four. And in this financial year, you will see more of NPD launches across categories. That builds the pipeline for future growth. Of course, all of us know that whatever NPDs you launch, everything doesn't click. But that fact has been well built into our plan.
Accordingly, for the rest of the year, the NPDs are planned, which will set the base for future year's growth. Of course, organic growth will continue.
Got it. Got it. That's all from me. Thanks and all the best.
Thank you.
Thank you. Participants who wish to ask questions may press star one. The next question is from the line of Harit Kapoor from Investec. Please go ahead.
Yeah. Hi, good evening. So, on HI, you mentioned that coil is the focus area because of the profitability issues there. But there is also the segment where conversion is happening into aerosol, which at least market leader is trying to improve the profitability of that segment. So, I just wanted to understand, since it is not in your deck, I know you have a product, but not in your deck recently. What is your thought process on that? At least in the near to medium term, can that be a bridge for you to stem kind of volume declines in HI? I know focus is on LV, but just a thought because that's a space that seems to be also growing at a fairly good clip. So, just wanted your thoughts on that.
Thanks, Harit. As I already indicated to you, the HI strategy, where we are headed, certainly, we are cognizant of the insecticide market and the growth opportunities which exist over there. And the necessary work is happening at an appropriate time. The rest will get to know what exactly we are going to do. Racket and Aerosol, we have already launched. So, that helps us manage the segmental margin, the portfolio margin. It helps us. And LV, as I said, we are growing profitably. So, a combination of all these three factors, plus loss minimization in coil, will certainly help us deliver a very different performance of HI segment in the coming quarters.
Got it. Thanks, Pawan. And second thing is on the working capital bid. So, your presentation suggests that the numbers have basically gone up from 5% to 18%. As you mentioned, part of it is due to RM inventory. Part of it is generally maybe a little structural. So, do we expect this number to kind of settle somewhere in between the FY24 and FY25 number? Because part of it would be, I'm assuming, part of it is structural if it's a channel mixing.
See, 15-20 days, historically, also, if you accept March 2024, which was an aberration, 15-20 days working capital is the norm that we can expect going forward.
Got it. Got it. And third thing was on soaps. So, you've seen a situation over the last three quarters in personal care. You've seen a declining value growth trend. Just wanted to know your view on that, and do you see the market normalizing with price increases and changes in pack sizes, etc.? Is that also, you believe, a second-half thing, or that can be sooner, say, maybe quarter two or something like that?
No, I think personal care, we are not quite happy with our performance. Let me admit that. You are right. Last year, we had a supernormal year in terms of, if you look at all the four quarters, it was exceptionally high growth that we delivered while the industry wasn't delivering that kind of growth in personal care. And also, we had the effect of Neem Naturals, which was getting rolled out throughout the year. Now, this year, of course, last three quarters, your observation is right. Neem Naturals, initial placement, etc., helped higher growth numbers in the previous year. Original Neem was also doing very well, double-digit growth in the previous year. But we have seen kind of slowdown this year, especially in the last two, three quarters. Price increases, obviously, we haven't taken to the extent we should have taken, but those actions will be taken going forward.
And we are also paying special attention in terms of our marketing strategy on the Margo franchise completely. So, I think the April, May, June, July period should show some good signals in this category.
Great. That's it from me. Thank you.
Thank you.
Thank you. The next question is from the line of Disha Giria from Ashika Institutional Equity. Please go ahead.
Hi. Thank you for giving me the opportunity.
Sorry to interrupt, ma'am. Can you be a little louder?
Is it better now?
Yes, ma'am.
Yeah. Hi. So, my question is regarding the 757 gross cash balance that we have. So, are we considering any inorganic growth opportunities or any shareholder wealth maximization opportunities?
So, Disha, the cash balance that we are carrying on the balance sheet, the board is cognizant of it. We have a great growth opportunity in front of us, both organically and inorganically. So, the board feels that we should be holding on to cash at this moment, and at an appropriate time, suitable actions will be taken, which will help us utilize this cash.
Okay. Yeah. That's it from my end.
Thank you.
Thank you. We will take our next question from the line of Senthil Manikandan from iThought PMS. Please go ahead.
Hi. Thanks for the opportunity. A couple of questions on the liquid detergent side. So, we are seeing a lot of sachet-based liquid detergents coming into the market. So, any insights on this? And do you see over the next three, five years, liquid detergent forming a majority of the market? And if that happens, any structural level changes can we expect from the market share perspective? So, that's it from me. Yeah.
On the liquid detergent, you see the dominance is there in the South India, and especially in Tamil Nadu, which is the biggest market in southern India, followed with other four states: Kerala, Andhra Pradesh, Tamil Nadu, Karnataka. Now, the shift is happening, especially in Kerala. We have noticed that there is a shift from powder to detergent liquid, which is happening at a very good pace. And also, to induce consumers to move from powder to liquid, there's a lot of trials which are happening, actually. That is why you see a lot of these sachets in the market. As of now, the liquid detergents are growing. I think it's growing reasonably well for us. And it's too early to comment on which way this is going to settle down. But in the near term, I think the growth is likely to continue in detergent liquid.
Just a follow-up. In terms of our market position and the market standing, so when there is a shift from powder to liquid, how are we positioning our brands, and can we expect a much better kind of execution and share going forward?
See, as we mentioned in our opening remarks also, our Ujala detergent powder, we have gained market share in Kerala, and that continues to be a stronghold for us. And other detergent powders are also doing well across different regions in the country. Liquid detergent, as I mentioned, South is the dominant market, and we are well placed across five states, and we are doing very good in Kerala and some of the other states. And this growth momentum will continue in the near term.
Okay. Thank you.
Thank you.
Thank you. The next question is from the line of Sumanyu Saraf from JM Financial. Please go ahead.
Yeah. Hi. All right. Some of my questions have been answered. My first question is on gross margins. So, your gross margins have been pretty good, which have been declining recently. So, is the benefit of forward cover, which you had in some of the raw materials over, and how do you see gross margins going ahead?
As I mentioned, I cannot delve too much deep into category-level margins, etc. But as I hinted at, some of the strategic moves that we make, keeping the market realities in mind, so whether it is in terms of sourcing raw material, whether holding finished goods inventory, producing and holding finished goods inventory, all these things and long-term relatively higher coverage, we use all these levers, anticipate and use these levers to handle our gross margin.
Okay. So, do you see it compressing or I mean, okay, so basically, it's an ongoing thing. So, I mean, some benefit should flow through in the coming quarters?
Range-bound, at a high level, I would say the gross margin would remain range-bound. We do not expect it to be materially different from what we are seeing right now.
Yeah. Okay. And in this quarter, we saw you reducing your ad spend and other expenses. So, I mean, any change in guidance of your EBITDA margin? It remains at around 16%-17%. What is the sustainable margins?
Sorry. Please go ahead.
No. So, basically, what are the sustainable margin levels? Because, as you said, this quarter, I think your expenses were significantly reduced as percentage to sales. So, going forward, I think that won't be the case. You had also alluded that. So, your guidance on operating margins remains the same, 16%-17%?
See, for the next year, as I indicated, as of now, we believe H2, we should be able to deliver EBITDA margin between 16% and 17%. H1, still, it is stressful. The early signals that we are getting from the market, the demand side is not very encouraging, at least in the month of April. So, there could be a couple of quarters' margin pressure here and there. It's not going to be significantly high, but there could be marginal pressure. But net-net directionally, if you ask me, I think 16 and 17 is the direction in which we are driving the business.
Understood. Thanks. What tax rate is expected for FY26-27? Will it be 23%?
Sorry. Could you repeat the question, please?
Yeah. What is the expected tax rate for FY2026-2027?
That's the same, as I indicated, 23% and 24%, between 23% and 24%.
Okay. So, just one last question. So, I mean, as your current contribution of LUPs to overall sales is increasing, I mean, are they putting a pressure on your operating margins?
Can you repeat your audio? Unfortunately, it's not very clear. Can you repeat the question, please?
Yeah. Yeah. As your contribution of LUPs to overall sales is increasing, is this putting pressure on your operating margins?
LUP, again, there's no standard percentage which applies across categories. It varies from category to category, segment to segment. The LUP portion could be as low as 5%-10% and as high as 25%-30%. So, it varies across categories. And we are handling it, understanding the nature of the category and the type of the percentage of LUP contribution in that category sale. So, net-net, we don't see major impact on the margin of the company. But, of course, some of the categories like dishwash, which is quite sensitive to some extent, personal care also, where the LUP plays a dominant role. So, and extra grammages, etc., particularly influences the category margin. So, we are aware of that, and we calibrate our approach accordingly.
Understood. Thank you and best of luck.
Thank you so much.
Thank you. Before we take the next question, we would like to remind participants that you may press star 1 to ask a question. The next question is from the line of Vishal Gutka from ASK Investment Managers. Please go ahead.
Yeah. Yeah. Hi, team. Great. Just wanted to check on this indirect reach. I think it has gone up by 8 lakh outlets during the year. So, it seems that wholesale acceptance of a product has gone up substantially. Just wanted to check from you, what additional steps are we taking to further improve the salience of wholesale? Given that increasing direct reach is a very high-cost exercise. And second question is on the new brand that you launched, Ujala Yangin Fresh. Techs are suggesting that they've seen a very, very good response from the trade. So, I believe there's a good chance it could be scaled up in a very meaningful manner. So, I think anything that you would like to highlight about this brand, Yangin Fresh in the fabric conditioner space for your launch? Thank you.
Yeah, Vishal. So, yes, we are happy that our overall reach, both direct and indirect, have gone up. It is also to do with a lot of brand acceptance that's happening across dishwash and your other portfolios. So, while our direct reach also we have increased by a lakh this year. So, all of this and certain other activities which we continue to do, that has helped us in increasing it. And going forward, you should be able to see much more indirect reach that's going to happen. So, we are overall happy with the way things have turned out, at least in the distribution space, from a future point of view. Yangin Fresh, yes, it's the initial launch, and yes, the feedback has been good. Now, again, this category sells more in the south comparatively, like your liquid detergents.
Right now, it's at a very small pace, but we'll soon catch up pace going forward. Right now, it's testing, and the initial feedback, both from retailers, consumers, have been encouraging. We'll have to see for a year to exactly say where the brand is, but have high hopes on that.
Got it. Got it. Thanks. And ma'am, any guidance you would like to do on volume front? I can understand revenue and profit would be difficult for you. So, volume front, what are we guiding for FY26? Are we targeting high single-digit volume growth for FY26?
See, volume growth, again, in the first half of the year, I think it will be mid-single digit. I mean, but the next half of the year, we are optimistic about hitting double digit, at least towards the end of the year.
Okay. Okay. Great. Thank you.
Thank you. The next follow-up question is from the line of Percy Panthaki from IIFL Securities. Please go ahead.
Hi, sir. You mentioned that you have started recently some price increases in some of the categories. So, just I was confused because typically, when the commodity cost goes down and most of your cost would be linked to crude, which is actually coming down, so at that time, typically, in the industry, there are no price increases which happen. So, can you give an idea in which categories the price increases are happening, and what is the reason behind the same, given that the input costs are trending downwards?
I don't know from where you're getting the sense that input prices are coming down. At least from our perspective, the key inputs, whether it is LABSA, whether it is soap noodles, or SLES, these important raw materials, they are all showing an upward trend. Whether it is quarter three to quarter four, quarter four versus last year quarter four, and even in the current period, current quarter, we see an upward trend. In fact, soap noodle prices year-on-year basis are 30%-40% up. SLES is 40% up. Still, 12%-15% increase we are seeing in SLES. So, there is an input pressure, input pricing pressure, at least from our perspective. And in personal care, as I mentioned, we did not take full price increase for the period in quarter four. And also, in fabric care and in HI, in coil, we have taken some price increase.
We are going to take some more depending upon the requirement because coconut shell powder, again, is going up. So, we are seeing an increase in input prices. So, that is the background for our price increase.
Understood. Understood. So, soap prices are going up. That is well known on the back of palm inflation. But that's a relatively small part of your portfolio. The larger part, which is detergents, where basically, it's mainly crude derivatives and dishwash also. Do you see an inflation there as well? And secondly, the price increases which you are talking about, those price increases are mainly in soaps, or have you taken in other apart from soaps and coils, is there anything else also where you have seen a price increase?
So, Percy, it is, like you said, your soaps, yes, to an extent, it is there, and it may later maybe come down a bit. But your LABSA and your SLES is on the rise, and it will continue, I think, till Q3, Q4, till at least Q3, I guess. So, it's on an upward trend. It's nowhere coming down.
Yeah.
noodle prices may probably come down at the end of quarter one or early quarter two, but others, we are not seeing any signal of coming down of prices in other commodities,
which has a direct impact on your fabric care and dishwash, both.
Got it. Got it. But then it's very surprising that in a situation where input prices are on the higher side, basically, your implied pricing at an overall portfolio level is negative. So, how do I reconcile these two things?
Come again, Percy?
So, I'm saying in a situation where your overall input prices are seeing an inflation, your overall product prices, as evidenced by the volume-value gap, are seeing a deflation. So, how do I reconcile these two things?
See, average realization in dishwash has come down because of the higher grammages. A little bit of impact is also visible in fabric care. And these two factors, and also now in personal care also, we have seen some impact over there. Now, with the price increases, we are going to correct some of these gaps.
Okay. Okay. Okay.
It's a function of competition again, the kind of competitive moves which are happening in the market, and we are observing them, watching it, and then we are reacting to it.
Got it. Got it, sir. Okay. Thank you very much.
Thank you.
Thank you. Ladies and gentlemen, in order to ask a question, you may press star and one. The next question is from the line of Bhavdeep Vora from Franklin Templeton Asset Management. Please go ahead.
Yeah. Thank you for the opportunity. My question is regarding the liquid detergent. Could you share some data? So, how big is this category, maybe if not at pan-India level, at least in South India or maybe the states of Tamil Nadu? So, what would be the kind of breakdown between, say, powder and liquid today? If some idea around that would be helpful.
See, I mean, these are our estimates. We believe that the washing powder, liquid detergent put together would be about 34-35 thousand crore category, growing at about 6-7% put together. Within that, liquid detergent would be roughly 3,000-3,200 kind of category size, which is growing at about 20-25% year-on-year. That's our assessment.
Okay. Fair enough. Thanks for that. Just to follow up on that point, so kind of you mentioned that we have seen a fairly strong growth in the liquid detergent. I don't know whether you quantified the numbers. Maybe I think 25% for the South India or something. But just when I was looking at the full year numbers, so this year, the EBIT margin for the home care, the fabric care has basically declined. So is it that this category is a bit margin diluted at the moment, or is it just a function of the overall competitive pressure in the industry? Maybe your comments around that would be helpful.
Sure. That's a very important observation. The overall fabric care margin in segmental, you see a slight decline from 24.2% to 23.6% this year. But within fabric care, we have main wash. Within main wash, we have detergent powder, we have detergent liquid, we have detergent bars, and then obviously in post-wash, we have Ujala Supreme, Ujala Crisp and Shine, and all of that. So mix plays a very important role because in terms of margin hierarchy, each of these subcategories carry a different margin profile. And also, the EBIT margin that you see is also a function of our A&P spend. So we should not be reading too much in terms of the slight decline that you see in FY25. But on a sustainable basis, I think fabric care margins are sustainable between 23%-24%.
Sure. So is it fair to assume that the liquid detergent is not margin diluted or?
No, as of now, it is. It is very much margin diluted. But again, it's a growing segment, but a small portion of the total portfolio. And everybody in the industry is.
This call is no longer being recorded.
Sorry.
Sorry. So there was some disturbance. I don't.
No problem. So yes, liquid detergent.
This call is now being recorded.
Hello?
No, yeah. It's the automated sound that the conference is being recorded. Yeah. Yeah.
So yeah, I know liquid detergent certainly is not the best of margins that we would love to have. But I think these are early times. Everybody, including us, everybody is trying to grow the market. But eventually, the liquid detergent margin would converge to detergent powder margin in medium to long term.
Okay. Thanks. That's it from my side. Thank you.
Thank you.
Thank you. Ladies and gentlemen, we will take this as our last question. I would now like to hand the conference over to the management for closing comments.
Hello?
Yes.
Thank you for your interest in Jyothy Labs. If there are any questions that we couldn't address today, or if you need any further clarity, please feel free to reach out to me. Thank you so much. Wishing you all a pleasant evening. Thank you.
Thank you. On behalf of Jyothy Labs Limited and ICICI Securities Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your line.