Good day, ladies and gentlemen. You are connected to Jyothy Labs Q2 FY26 earnings call hosted by ICICI Securities. The conference will begin shortly. Please stay connected. I repeat, participants are connected to Jyothy Labs Q2 FY26 earnings call hosted by ICICI Securities. The conference will begin shortly. Please stay connected. Thank you. Ladies and gentlemen, good day and welcome to the Jyothy Labs Q2 FY26 earnings call hosted by ICICI Securities. 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 touchstone phone. Please note that this conference is being recorded. I now hand the conference over to Dheeraj Mistri from ICICI Securities. Thank you, and over to you, sir.
Yeah, hi. Good evening all, and thank you everyone for joining this call. First of all, I would like to thank the management of Jyothy Labs to give this opportunity to host this call. From the management, we have with us Madam Jyothy with us and Mr. Pawan Agarwal, CFO. Over to you, ma'am, for your opening commentary. Thank you.
Thank you. Good evening, everyone. Thank you for joining us for Jyothy Labs Q2 FY2026 earnings call. Our financial results and investor presentation are available on our website and the stock exchanges, and I hope you have had the opportunity to go through them. The operating environment in Q2 was mixed. While the quarter started on a positive note, the GST rate revision announced by the government in September 2025 caused some disruptions in the marketplace. As a result, growth in the September quarter was nearly flat as the distribution network adjusted to the new GST structure. However, the early demand signals are encouraging as we have begun quarter three. During the quarter, the government implemented a revised GST rate structure for several daily essential categories.
For Jyothy Labs, this included key products within our personal care portfolio, such as toilet soaps and toothpaste, which together account for around 11% of our business. The benefit of lower GST has been fully passed on to the consumers through revised pricing, and the change remains cost-neutral for the company. This transition led to temporary disruption across rate channels as distributors and retailers adjusted to the new rate structure and refreshed inventory with revised prices. We continue to believe that a broad-based consumption recovery is underway, aided by supportive fiscal measures, tax rationalization, and stable macroeconomic conditions. We expect the demand environment to strengthen gradually through the second half of the year. Across channels, general trade remained subdued, while modern trade, e-commerce, and quick commerce maintained double-digit growth, led by strong performance in fabric care and dishwash. Let me now turn to the performance of our key segments.
In fabric care, both main wash and post-wash delivered an encouraging performance. Value growth was 6.1%, and volume growth was in high single digits. Liquids more than doubled year-on-year, driven by strong performance from Henko, Ujala, Mr. White, and Exo. Detergent powders and bars maintained their momentum. New launches made in the past few months have been well-received and are delivering sales in line with expectations. We also introduced Dr. Wool, expanding Jyothy Labs' fabric care portfolio into a premium niche and strengthening its presence in special garment care. The dishwash segment volumes grew 3.4% despite a 3.8% value decline, driven by price corrections and grammage offers on bars. Liquid continued to outperform bars. The performance of the personal care segment was impacted by the GST transition in September. We expect the segment to normalize and return to growth in H2.
In household insecticides, the growth remained muted as we continue to focus on profitability improvement over the next four to six quarters. New product formats such as Maxo Aerosols and Anti-Mosquito Rackets are showing early traction. The medium-term focus remains on driving efficiency and turning around the category. In summary, despite short-term disruptions from the GST transition, our fundamentals remain strong. Rural demand trends are encouraging, premium segments are expanding, and modern trade and digital channels continue to gain share. We remain confident of delivering steady broad-based growth in the second half of FY2026. Now coming to our financial performance, revenue from operations for Q2 stood at INR 736 crore, reflecting value growth of 0.4% and volume growth of 2.8% year-on-year. The difference between value and volume growth was primarily due to MRP reductions, higher grammage, and promotional price-offs in select categories.
Gross margin for the quarter was 48.1%, lower by 210 basis points year-on-year, mainly due to input cost pressure and price reduction and consumer offers in select categories. Sequentially, however, gross margin was protected despite lowering of prices in certain categories. Also, commodity prices saw some signs of stability during the quarter. Employee costs increased by around 5% year-on-year and were maintained at 11.5% of revenue on a sequential basis. Advertisement and promotion spends were at 8.4% of revenue, marginally higher than the same period last year. With expectations of a better sales trajectory, we made a calibrated increase in brand and trade investments during the quarter. Other expenses remained range-bound at around 12% of revenue, supported by cost discipline and operational efficiencies despite subdued market demand. Despite input costs and volume pressures, EBITDA margin was maintained at 16.1%, in line with our earlier guidance.
We expect EBITDA margin to remain in the range of 16%-17% in the second half, assuming commodity prices remain stable and demand continues to improve. Operating EBITDA for Q2 stood at INR 118 crore, and PAT was at INR 88 crore. For the half-year ended 30 September 2025, revenue from operations was a little over INR 1,487 crore, representing 1% value growth and 3.2% volume growth. Fabric care and dishwash segments delivered mid to high single-digit volume growth during the period. Gross margin for H1 stood at 48%, compared to 50.8% in H1 last year, while operating EBITDA margin was 16.3% against 18.4% in the previous year. The effective tax rate for the half-year ended was 25%, compared to 24.2% of FY 2025, and is expected to remain in the range of 24%-25% for FY 2026.
Net working capital stood at 22 days as of 30 September 2025, compared to 19 days as of 31 March 2025. The temporary increase in working capital was due to a shift in channel mix with a larger share of business now coming from modern trade, e-commerce, and quick commerce, where credit cycles are longer than in general trade. We expect net working capital to normalize around 18-20 days in the medium term. Net cash generation from operations improved to INR 196.5 crore, compared to INR 188.9 crore last year. With a strong cash balance of INR 801 crore and zero debt, the company remains well-positioned to fund growth and invest in innovation. We remain cautiously optimistic about a gradual improvement in demand and further stability in commodity prices. Our focus remains on profitable and organic growth, strengthening core categories, investing in innovation, and scaling up new product launches.
I would like to take this opportunity to thank our teams for their continued commitment, our trade and distribution partners for their support, and our investors for their trust and engagement. We appreciate your time today and look forward to your 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 touchstone phone. 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. We will wait for a moment while the question queue assembles. The first question comes from the line of Rishab Shah from Bugle Rock PMS. Please go ahead.
Hi, thanks for the opportunity. First question was we had launched a new bleeding soap, Jovia. I had a just question on that. The previous soap brand, Margo, was not as successful as we were expecting. What is your thought process on this new brand? How can we make Jovia as a brand?
Hi, Rishab. See, Margo Neem Naturals is the one that you're talking about, and it is doing reasonably well. Now, as we see in Q3, we can see good enough improvements in the brand and in personal care. Jovia and Margo both put together are delivering for us from Q3 onwards. Yes, the first half was muted, but going forward, both of these brands will start delivering.
Okay, so by when can we expect to have a significant contribution from these brands, like from the next year onwards or from the second half of this year?
See, personal care for us in the first half was muted. Going forward, yes, it should come. Jovia as a brand is a new brand, so it will take its time, but it's doing fairly well.
Moreover, we have actually made good investment behind the Margo franchise in terms of advertisement spend in this quarter, and those investments are also going to yield good dividend going forward. Both original Margo and Margo Natural are likely to perform better as we go forward. Yeah, my next question was what, in terms of some product category, we have not been as much successful on the national level in some of the product categories. We have remained in a comfort zone in the southern markets.
What are your future plans to make the product a national brand and expand more in the other than the non-south region of India? Which products of your portfolio can make it?
Actually, the comment that you made that our brands are focused or concentrated in southern India only is not entirely correct because our revenues from southern India have come down from 48%- 33% over the past few years. We are expanding our product portfolio to a pan-India basis. That's point number one. Point number two, there are many brands. You can take Exo, you can take Pril, you can take Margo, you can take Ujala also now is expanding and going upwards. There are many brands which are pan-India, and it would be unfair to categorize us as a southern India-based company and all the brands focused on southern India.
Okay. Thank you.
Thank you.
I will contact you.
Thank you. The next question is from the line of Vishal Gutka from ASK Investment Managers. Please go ahead.
Yeah, I'm Adam. Three questions from my side. First question on the aspiration for revenue growth for second half in 2027. This is the context that competitiveness has gone up across segments, and HUL also is going very aggressive across categories. What are your thoughts on that? Secondly, new launches, a couple of new launches we have made. First thing is on the wool, and secondly, Ujala Young & Fresh. Are we expecting to enter more categories? Because second half has already started with H2C launches. What is the overall new product launch calendar? Third question on the M&A front, now almost INR 800 crore on books, right? What are your thoughts? What is the constraint that is hindering us from making acquisitions? Thank you.
Yeah, Vishal, second half, yes, it is a very competitive market. But since there are a lot of positive indicators that are there, and also going by what our October sales have been, it looks positive. I can only comment that we are aiming to be back like how we were in the past. We are trying to do all that it takes for building our brands and making it grow volume-wise double digits. Okay, at least by exit of this year, we should aim at double-digit volume growth.
Value and volume should be similar, or there should be a gap in value and volume growth?
There will be a gap, Vishal, because we have been maintaining that given the market scenario and the average realization being lower. There will be a gap, and this gap would be different for different categories. On an overall basis, there will be a 2.5% gap.
Okay. Got it. Thank you.
Yeah, and NPDs, Dr. Wool, what you mentioned is a very recent launch. It is a specialized garment care, especially for your winter clothes and your delicate fabrics. It is just launched, and it has been well received. It will be mostly selling, especially in the winter months. There was a gap there in the offerings, and hence we have introduced that. Young & Fresh, yes, we had introduced it early on in this year. It is a fabric conditioner, and it has also been received reasonably well. Yes, going forward, these are the other two brands that will be contributing in the fabric care category. A few more NPDs will be there, which you will come to know when we launch it. There are a couple of them in the pipeline. Yeah.
Will we launch in 2026 only, or are we planning to postpone to 2027?
No, so you will see more launches in this year itself. Of course, there will be some lined up for next year.
Got it. Got it. Thank you.
On the third question on M&A opportunities and the cash balance, as we have mentioned in the earlier calls also, we are actively looking for the right asset, and we have explored a few of them, and we are in talks with a few of the assets, a few of the businesses. As and when it materializes, it will be made known to the streets.
Got it. Wishing you all the best, Jyothy Madam and the team. All the best for future products. Thank you.
Thank you.
Thank you.
Thank you. The next question is from the line of Nitin Shakhdher from Green Capital Single Family Office. Please go ahead.
Good evening, Jyothy and to the management. My name is Nitin Shakhdher. I'm from the Green Capital Single Family Office. My question is more as an investor rather than an analyst. If I look at the categories which the company, obviously its legacy businesses are in, there are a couple of new brands and upstarts which are coming in with low volume, but maybe differentiated products. Now, we just spoke about M&A and the acquisition, but just wanted to get a flavor of the aggressiveness of the management in terms of trying to take over categories from newer players, let's say like Copar, Oclean, and all that.
I just wanted to get a sense of how the company's adversarial growth, one through organic and inorganic means, because it's obviously sometimes easier or less expensive to take over a brand rather than build a brand from scratch, at least in terms of the premiumization strategy. Just a little flavor on that would be nice. Thank you.
Thank you, Nitin, for this question. It's a classical debate of make or buy. As I mentioned, we are looking at assets which actually complement us and the adjacent categories, and the asset which we are able to leverage on our strengths. It will be a combination of all these factors. We believe that we have huge runway available in terms of our existing categories for organic growth. In terms of future growth, it will be a combination of both organic and inorganic.
Yeah, I mean, I understand that. What I was coming to was that more in terms of slightly higher growth than the category or the market, which is consistent, and Jyothy for the many 10, 15 years has been on consistent growth categories. How does a brand take the leap forward and not risk newer competition coming in and eating in margins? It is a classic case of an investor trying to decode the long-term runway of a company, not so much in terms of analysis or percentages and quarterly, quarterly margins. That the company very well knows. Just sort of a discussion on that.
Yeah, so Nitin, the only way to build any brand for us, yeah, quarter-wise is not something that even we are focused on. We are more here for the long term. That is why you see consistent investment, be it ad spends, be it innovations, and the kind of R&D pipeline that we have developed. Some of the launches that you will see in the coming years is something that we are already preparing. To say that we actually do not need an acquisition in that sense. We have enough to grow organically with our current brands and the pipeline that we have. Having said that, to fast track growth and to have even more aggressive this thing is where the acquisitions will help.
Yes, we have a few things lined up with differentiated offerings, and that should be able to do the fair contribution in the coming years. That is what we are expecting, and let's see where it takes us.
Okay, ma'am. All the best and all the best for quarter three and quarter four. Thank you.
Thank you. Thank you so much.
Thank you. The next question is from the line of Umang Shah from Banyan Tree Advisors. Please go ahead.
Hi, ma'am.
Mr. Umang , you are not audible.
Am I audible now?
Yes, sir. Please go ahead.
Okay. Thank you so much. Thank you for the opportunity. Sir, ma'am, wanted to confirm the first was only our personal care portfolio is affected by the GST, right? Everything else is no change.
Yes.
Okay. Would it be possible to quantify the GST impact? I mean, if things were normal, how what would have been our growth?
It's difficult to put a number behind this, but there was a general disruption in terms of channel. The order optic was significantly dropped. In fact, at the Kirana store level, they had taxpayer stocks, so they were reluctant to place order until their taxpayer stock inventory gets liquidated. Similarly, the distributors were also, they slowed down their orders. Overall, personal care was largely affected because of the GST reduction. In other categories also, although they were not covered by GST, there was a lot of confusion and chaos in the channel. The safest thing that they could do is to stop buying and wait for the final situation to get clearer by 22nd September. As a result, as Jyothy mentioned in her opening remark, this was affected. The business was affected in September.
Got it. Got it. Although the category affected was only 11%, because the same distributor has a lot of confusion with respect to other things also, there was this talking across the segments, not just personal care.
That's correct.
Got it. Thank you. Second question was with respect to making the home insecticide segment profitable. For more than three years, I think the illegal incense sticks have been causing a big damage both to the consumers and to the sector as a whole. At that time, our understanding was that once there is some action on these, we would get back with our coils, and then we were also focusing on liquid vaporizers. Now, we are saying that we would want to focus more on profits. I just wanted to understand how would you want to go about it? And as per your internal working, when is the breakeven apparent?
In HI segment, our stated position is that we are focused on turning around this segment, and we are not intending to lose money behind coils. That is a conscious call we have taken. We are focusing our energies, investments on liquid vaporizer, and we have also launched new products, Maxo Aerosol and Anti-Mosquito Racket. All these categories are profitable categories, and they are doing good for us. Of course, this is going to take time, and we have indicated that it may take another four to six quarters for this category, this segment to turn profitable. That is the time it will take in our assessment.
Got it. Sure. Thank you. Just last question, if I can squeeze in. We have relied on having brand ambassadors for all of our products. That also makes a lot of sense because we have a rural-focused distribution of products also. I just wanted to pick your brain on in the last one year, have we done a different kind of an activation through social media or something, and how have been the results? Going forward, how would you allocate your spends towards digital?
Yeah. We have been investing behind digital medium while TV is also important for us being an FMCG company. We are increasingly also shifting our budgets towards digital and rural markets also. If you see some of our products, it depends on the brands and what priorities we have and which regions, what focus we need to do. We take those calls accordingly. The digital spends definitely have increased from what it used to be.
Got it. Got it. Thank you so much. I'll get back in between.
Thank you.
Thank you. The next question is from the line of Harith Kapoor from Investech. Please go ahead.
Yeah. Hi, good evening. Just on this volume growth bit, Pawan, you mentioned there is a disruption, and it's not only in soap, it kind of filters out across because of the distributor behavior. Most companies are calling out like a 2%-3% type of a disruption in terms of the growth. Would our number also be in that same ballpark? I just want to understand real volume growth to get a sense of how to build the gradual improvement into H2. That's the first question.
As I mentioned, for us, it is very difficult to put a number on the GST disruption. Overall, personal care took the biggest brunt in terms of GST. In other categories also, there was some impact, but the bigger issue was on personal care.
This personal care margin bit, which is the second question, if you look at last quarter, it was a flattish revenue growth. It used to be double-digit a bit. With a deceleration minus 4%, is the operating deleverage so high that the margin moves as it does? Should this margin move back to normalized level in quarter three as the normalized growth starts to resurface?
Very good question, Harith. There are two, three points which have led to the margin bleep that you see in quarter two in personal care. I mentioned earlier that in this quarter, we have made a sizable investment behind Margo brand. That is kind of one of the items which are sitting in personal care, EBITDA margin. Second is last year in H2, maybe towards November, December, January, the price increases that we had taken in Margo, those price increases have actually impacted the sales subsequently. You will see a lower sale. For the input prices, if you look at the palm oil prices, quarter two this year versus quarter two last year, there is 14-15% increase. Input prices have gone up. That has also affected.
I can indicate that going forward in a couple of quarters, we will be back to double-digit margin. Some of the actions that we are taking and the investment that we have made, that would help us accelerate our sales growth in personal care, and the margin should swing back to double digit.
Got it. Got it. And on the dishwash bit also, the deflation or lower realization, whatever impact you can call it, which is almost like 6%-7%, given that volume growth is still pretty good. How much of this is like scheme-led competitive intensity, and how much of it is like actual pricing? Why I'm asking is how much of this should be kind of extrapolated? I know you've given an overall 2%-2.5% number into H2, which will be deflation, but just on dishwash, how much of it is scheme-led? How much of it is kind of actual price cuts? Just wanted to understand the market.
It will be a mix of both, actually. Again, the bifurcation between scheme and others is difficult for dishwash. The lowering of MRP in certain SKUs in bars and also in liquids, the average realization being lower. Both these factors have actually led to this price decline in dishwash category in the quarter.
Okay. Okay. Got it. Got it. On the HI bit, I know the season has also been a bit challenging. That is reflective even in the other company's numbers. How much is the mix now in H1 for LV versus coil for our business now? How much has that number gone up? If you could just help us understand that. I get your four- to six-quarter thought on breakeven, but how have you progressed on the LV ratio versus coil? If you could just help us understand that.
Yeah. I can tell you LV has surpassed coil. That is the first milestone we have achieved. We are gradually building on. Aerosol and Rackets, as I mentioned, are also falling in the similar category. We are taking tiny steps with the objective to turn around the category in four to six quarters.
Okay. Understood. Understood. Last point was on distribution. H1, have we seen, I know we do talk about 10% typically in distribution expansion or direct side. Given all these disruptions this time around, etc., has the distribution-led piece been a bit slower? Any sense on the full year? Does it get shifted on to early part of next year in terms of increasing touch points on the direct side? Some thought on distribution.
Harith, distribution for us, yes, we have done quite a bigger part in the last five years, and it still continues in the same way. Since the base is higher, I mean, anything additional will look a bit smaller, but we are continuously investing or focus is definitely there on increasing the number of outlets. That is still the main focus.
Jyothy, one last one maybe to you was the optimism on closing or exiting at 26 on double-digit is very, very encouraging. Are you seeing some of these positive triggers already play out? We are already almost a month and a half into or halfway through this quarter. Does your optimism also stem from what you are already seeing on the ground? Maybe that coupled with maybe the innovation pipeline, is that the way to think about it?
Yes. Definitely. I think we are happy that our new NPDs have been received well. We'll continue to focus on building those brands, and we also have a few things in the pipeline, which obviously eventually you'll come to know. Yes, our focus is there on the fabric care category and on other categories as well. Yes, the launches have been more in the fabric care this time. Yes.
Got it. I'll come back if I have more. Thanks for your show on this.
Sure. Sure. Thanks.
Thank you. The next question is from the line of Rishab Shah from Bugle Rock PMS. PMS, please go ahead.
Thank you for the opportunity. As we've read that Jyothy, edge has been created around retail servicing, the personal touch to both distributors and to the retailers. These distributors and retailers, when they are in bad times in terms of.
Sorry. Sorry. Your audio is not clear. We are not able to understand. Operator, can you just check that line?
Mr. Rishab, could you please repeat your question and use your handsets only?
You're right.
Yeah. Am I audible now?
Yes.
Yes. Please go ahead.
Yeah. As we've read that Jyothy's edge has been created around retail servicing with a personal touch both to distributors and to retailers. These distributors and retailers, when they have bad times in terms of inventory, let's say the payment is not done on time and some other problem, how do Jyothy as a company help them in such times?
See, Rishab, one is we do business on cash. Only if they are able to do that is what, so if you see, we do not give credit in the market, especially you are talking about general trade. Most of our country distributors, we do not extend credit. We do business only as much as they can actually fund. There is nothing beyond that we do. Yes, there is a personal touch. There is a relationship that our field staff has built over the years. They know that we service them well. That is the understanding. It is all based on trust. That is about it. Nothing more.
Next question, how is Jyothy Labs a different organization than the other FMCG company or competitors in terms of hiring employees, the work culture, and maintaining relationship with these distributors?
No. As Jyothy said, our focus has been to our relationship with the channel, whether it is distributor or retailers, has been very deep. We service them on time in full. Our endeavor is to get the products up to the consumer using the distribution channel. The service is the differentiator. Second is the value that they get for various brands that we sell and the price that they pay. This is another aspect. Thirdly, the culture that we have built in the system is in our business, it's a clean sale. We do not extend credit and overdue, and then all of that in general trade, which is the sizable part of our business. We do not get into that kind of situation. The culture remains clean.
There is unwanted pressure is not there on these hygiene factors on the sales post for a large part of our business. I think these are the things which we believe that these are unique propositions from our side to the market.
Okay. Just last question. As you say, you are spending more on the rural side for some brands. Just wanted to know what was the contribution from the rural area towards our revenue three to four years back versus now?
40%, Rishabh.
Right now, 40%. And what was it three to four years back?
It remains more or less similar.
Okay. So as you're spending more on the rural side, but the contributions remain more or less similar to our top line?
Yeah.
Okay. Thank you. Thank you so much.
Thank you. The next question comes from the line of Senthil Manikandan from ITHART PMS. Please go ahead.
Hi. Good evening. Just a couple of questions, if I may say. Firstly, on the distribution channel mix, so on the initial comments, Jyothy Madam has highlighted that there has been some slowdown in VT that has led to the higher share of other channels and in turn impacting the working capital cycle. If you can share what's the current proportion of e-commerce and modern trade versus VT over the last year?
Overall, if you look at the channel distribution in the company, our general trade is roughly two-thirds, and the other channels put together would be one-third. The other channels constitute modern trade, e-commerce, quick commerce, institutional sales, export, all put together. That is one-third of our total sales. We do not give e-com, quick com, various subsegment breakup. We do not share that information.
Okay. So in terms of growth, any insight like how the different channels are growing?
Yeah. I mean, the entire basket that I just explained, that basket is doing well, is growing. Within that, e-commerce, quick commerce, and modern trade, that is doing reasonably well.
Okay. This slowdown in VT, it's majorly in the urban markets because of quick commerce, or it's like widespread panel level or VT?
Largely, it is concentrated in urban markets as far as general trade slowdown is concerned.
Okay, sir. Thanks. Second question is on the liquid detergent side. Up late, we have been seeing a lot of regional brands also got into this liquid detergent, and they have been offering below INR 100 on a per-liter basis. In terms of competitive intensity or in terms of differentiation, what the company is doing on the liquid detergent side, it's good that you have doubled the sales. Kudos to the management. Just want to know, with these regional brands entering, how is the landscape panel look?
Yeah. Like you said, there are local players. For us, we'll invest behind the brand. That's the biggest differentiation, Senthil. When it comes from an organized player, it comes with quality. The brands that we have launched, we have to live up to the name. The quality that we offer and the price, yes, it has to fetch that price, right? Local players, we do not know, their quality may be good this time. It may be bad next time. That is how they operate at cheaper prices. It is a matter of time that consumers understand which is a quality product. For that, we continuously will invest behind our brands. It is totally up to the consumers whether they want quality or they want to go for a cheaper product.
Okay. Thanks. That's all from me.
Thank you.
Thank you. We will take the last question from the line of Vishal Gutka from ASK Investment Managers. Please go ahead.
Yeah. I think just two questions. I think the HI margin piece. I think a couple of things are very clear that movement towards liquid and consolidation of manufacturing facility that you're doing for HI. Can you please highlight what are the other things that you're doing to turn around this business operation? Second, on the personal care front, I think that during the quarter, you also had to project trade support. Even the new prices in the GHC region are lower. What was the stock that was lying in the trade? You had to provide some support. That was one of the reasons for declining margins?
On the first point, HI, there are a lot of actions which are happening, and it is a plan on which we are working. At this stage, we will not be able to disclose what exactly we are doing at the back end. It is a combination of actions that we are taking on the product subcategory, which is oil and liquid, and then pricing, and then the scheme, and then back-end operations. It is a combination of a lot of factors, and we are working on that.
Second, can you repeat your second question, please, Rishab?
Yeah. For the Margo, since the prices were lower under the new GST regime, right? So whatever the stock that was lying in trade, you were supposed to provide a trade support because of differential between the prices with the new and old?
No. When we sell to distributors, they had purchased at 18% earlier. When the new rates came in, the rate became 5%. Actually, they are having 13% advantage. They are having that input credit, which they can utilize. There was no question of providing any support to distributors.
Got it. Thank you. Thank you so much. Thank you.
Thank you.
Thank you. In the interest of time, this was the last question for today's conference call. I now hand the conference over to the management for closing comments. Over to you, sir.
Thank you, Dheeraj, and thank you, Operator. Thank you, all the investors, for your continued interest in Jyothy Labs Limited. Have a pleasant evening, Eric. Thank you.
Thank you, sir. On behalf of Jyothy Labs and ICICI Securities, that concludes this conference. Thank you all for joining us, and you may now disconnect your lines.