Investor update

Jun 18, 2026

Press release

Summary

Pril and Fa licenses ended May 31, 2026, with operations stopped from June 1 and arbitration underway over exit terms. Pril was 7%-8% of revenue; FY 2027 is a dishwash transition year, with renewed investment in Exo and cross-category launches planned.

Good evening, gentlemen. Good day. Welcome to the Jyothy Labs conference call for an update on Pril and Fa brand 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 and then zero on your touchtone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Ashutosh Joytiraditya from ICICI Securities. Thank you and over to you, sir. Thank you, Sagar. Hello, and good evening, everyone present on the call. On behalf of ICICI Securities, welcome you on this update call by Jyothy Labs. I would like to thank the management to give this opportunity of hosting the call. From the management, we have Jyoti ma'am, the CMD, and Mr. Pawan Kumar Agarwal, the CFO. I now hand the call over to Jyoti ma'am for her opening remarks. Thank you. Thank you. Good evening, everyone. Thank you for joining us today. This call addresses the developments relating to Pril and Fa, two brands that have been part of Jyothy Labs' portfolio for nearly 15 years under brand license agreements with Henkel. Before we proceed, one point must be placed on record. The company has initiated the dispute resolution process under the agreement. There are therefore areas where we will remain measured in what we say. We will not comment on claim amounts, valuation estimates, timing of any outcome, or probability of success. These matters will follow the contractual and legal process. The purpose of this call is to provide investors with business context, what happened, how the transition is being managed, and how we see the path ahead. In 2011, Jyothy Labs acquired Henkel's India consumer business through a composite transaction covering brands, assets, and operations. As part of this arrangement, certain brands became fully owned by Jyothy Labs. Brands such as Margo, Neem toothpaste, Tuhina, and Chek are fully owned. Mr. White and Henko continue under perpetual license arrangements with no royalty obligations. Pril and Fa were operated under fixed-term brand license agreements with Henkel, with royalties and defined exit provisions. Over the last 15 years, Jyothy Labs invested significantly behind these businesses in distribution, manufacturing, trade relationships, channel presence, and consumer franchise creation. Pril, in particular, became an important brand in the dishwash liquid segment under our stewardship. Henkel has communicated that it will not renew the Pril and Fa brand licenses following the end of the license term on 31st May 2026. Jyothy Labs respects this decision. As instructed by Henkel, from 1st June 2026, Jyothy Labs has stopped manufacturing, marketing, selling, and distribution of Pril and Fa. The company will follow the exit process in line with the provisions of the agreements. For several months, Jyothy Labs and Henkel were engaged in active discussions covering revised commercial terms, operational alternatives, and business continuity options. These discussions concluded without a mutually acceptable framework for continuation. We have now evaluated all our available options and are pursuing legal remedies to assert our contractual rights on the exit and transition mechanism. Jyothy Labs is not disputing Henkel's ownership of the Pril and Fa brands. The question is: what follows from non-renewal under the agreement? The agreement contains an exit framework, including a defined contractual process for transition and valuation matters. Among them, a mechanism for determination of consideration linked to the business momentum and goodwill created during the license period. Commercial discussions were pursued over several months but did not result in mutually acceptable resolution. The company has therefore initiated arbitration at the Singapore International Arbitration Centre to protect its contractual rights and the interest of its stakeholders. This is the agreed dispute resolution process under the contract, and the company will pursue it accordingly. Separately, operational matters, including inventory, receivables, trade schemes, and channel settlements are being managed as part of the normal transition planning. At this stage, the company does not expect any material residual exposure from such items. Pril has been an important contributor within the dishwash liquid segment. There will therefore be a near-term impact on revenue mix and margins during the transition phase. Within the dishwash portfolio, Pril has historically been the anchor brand in liquids, while Exo has been the stronger franchise in bars. Exo Liquid has been part of the company's portfolio since 2005, 2006, and is now being scaled up with renewed focus and investment. The company's objective is to strengthen Exo as the broader dishwash franchise across formats. Manufacturing facilities are multi-product and flexible, allowing capacity redeployment across liquids and other growth categories. The company does not expect material stranded manufacturing exposure arising solely from this transition. The contribution of Fa to the company's overall business has remained limited. Its exit does not materially alter the company's operating fundamentals. Henko and Mr. White arrangements are structurally different. They are held under perpetual license with no royalty obligation and do not carry the same fixed-term renewal provisions that existed for Pril and Fa. The company recognizes that FY 2027 will be a transition year for dishwash liquids. Near-term margin softness is expected during this phase. However, the medium and long-term fundamentals of the business remain intact, supported by the company's diversified portfolio across fabric care, home care, and personal care, its established distribution network, manufacturing capabilities, and execution strength built over several decades. Jyothy Labs remains committed to transparent communication, disciplined execution, and long-term value creation for its stakeholders. Further updates will be made as and when required in accordance with applicable law and regulatory requirements. We will now take questions. Thank you very much. We will now begin with the question and answer session. Anyone who wishes to ask a question may press star and one on their touchtone 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. Ladies and gentlemen, we will wait for a moment while the question queue assembles. Again, to register, please press star and one. Your first question comes from the line of Vishal Gutka with ASK Investment Managers. Please go ahead. Hi, madam. Just two questions. If you can, just elaborate, what was the revenue size of Pril? Our estimate is approximately INR 2-3 crores. What action, if you can give more granular details, exactly what are you trying to do to mitigate the impact? I understand it will be a transitory thing, but in next 12-24 months, by what time period we could recover that revenue? Definitely, one way is through pushing Exo liquids. That is the thing. My second question is why Pril was not a brand, how Henkel and Mr. White has placed perpetual rights that they had, right, the brand. Why Pril was not played into that kind of segment? Logically, whenever we see this kind of agreements, generally the brands are for perpetuity, so why this kind of agreement was there, first of all, for Pril? If you can elaborate, in the initial part of communication, you highlighted that it won't be stressing on the more details with regards to what exactly happened. Was royalty rate a deterrent, given that 2% royalty rate was there, and maybe they asked for higher royalty rate or whatever was the issue? Thank you. Thanks, Vishal. Let me answer your second question first. Pril and Fa, as Jyoti explained in her opening remarks, had a different arrangement. It was a fixed-term license arrangement with defined exit provisions. It kind of mirrored the perpetual license picture because the brand had seamlessly renewed twice over the last 10 years. Henkel had, in these years, never indicated any intention to withdraw or recall these two brands. Operationally and for practical purposes, the Pril brand behaved like a long-term asset or brand in our portfolio, like other brands. Given this long renewal history, absence of any recall signals from their side and the strategic partnership context, we had no basis to treat these two brands very differently. I think this was the context of Pril and Fa brand. As far as the strategy part is concerned, Jyoti, would you like to? Yeah. Vishal, it also is that you asked the question why it was not treated like Henko and Mr. White is because Henko and Mr. White is not there in other geographies globally. While Pril is, Henkel do operate in the other countries by themselves. So hence, this was always a renewable kind of a contract. So that answers your that question. And renewal happens every 5 years because I think Pawan highlighted it in past, in decade, two times we have to renew the agreement. So this renewal was for every 5 years or 1-2 years? It was auto-renewal. It was auto-renewal, Vishal. Yeah. Okay. Every 5 years, auto-renewal used to happen. Yeah. Got it. Yeah. Go ahead, madam. Going forward. Sorry. Go ahead, sorry. Yeah. Going forward, our focus now will be on Exo. Exo, like I said in the opening speech, we always had Exo in the liquid category. From 2005, 2006, we had launched Exo. Exo, as such, as a brand was operational from 2001. Started with bars. Then in 2005-2006, we had launched the liquids, and we were growing as a brand. That's when Henkel happened in 2011, and from then on, we felt that since we have Pril in our portfolio, we'll focus on liquids under Pril, and we'll make Exo focus on the bar segment. Now that this is there, we will bring back our renewed focus and attention on building Exo as a complete brand. That's where the future growth will come from. By what period we could expect to recover the Pril revenue? Maybe in the next 2, 3 years, shall we expect Exo to be in a position to recover whatever the loss because of Pril? See, yeah. That we cannot comment on that. But yes, our efforts are there that we sooner make that happen. Having said that, we are also trying to grow all of our other brands and see that the impact is minimized overall. Some will come through Exo, and our other brands will also grow. We also have few NPDs in the pipeline, which we will try and see that covers up the gap that is there created. Having said that is first on the overall revenue thing that we are trying to achieve. While for Exo, we will be building it. It will take its time, but our efforts are there to make that brand stronger as we go. Okay, got it. Madam, if you can just comment what is the revenue size of Pril, broader numbers. I don't know the exact numbers, but broadly, if you can tell us what is the broadly revenue size of Pril. It's about 7%, 8% of our company's total revenue. Got it. Broadly, INR 225 crore to INR 240 crore, that is the broader number that we have. Yes. Got it. Thank you. Wishing you all the best. Thank you. Thank you. The next question comes from the line of Harit Kapoor with Investec. Please go ahead. Mr. Kapoor, your line is unmuted. Please proceed with your question. Yeah. Hi. Sorry. Can you hear me? Am I clear? Yes. Please proceed. Yeah. Just two or three questions. One was from a pricing standpoint, wouldn't Exo Liquid be not at a similar price range as Pril? Apart from Exo, would you need another kind of a premium liquid brand to kind of offset what's happened with Pril? That's one. Second question was on, do we model two months for this year on Pril sales, or even May would be a kind of weak-ish month? Do we model two and a half months? You said June 1st. Is it strictly a two-month modeling, or there is an increase in the system that we should model a little higher in terms of revenue from Pril for this year? Third is, if you look at distribution, Pril had a good share in modern trade, e-commerce because of its premium nature. Do you lose a little bit of this distribution strength in alternate channels? Or were you already populated with your premium detergents and other products, so that is not much of a concern at all? Those were my three questions. I might have one more comeback. Harit, you asked about pricing. Yes, Pril was at a premium. From an Exo pricing point of view, it is at par with the market leader. Okay? So that's where the pricing is. Pril was always at a premium when it came in the market, and it always maintained that. So that is on the pricing bit. On distribution, yes, Pril did have a kind of strong presence in MT as well as GT, all the Tier I and metros, this thing. But Exo is a stronger brand, and we have our confidence on Exo to build the brand as well. It's much larger in size, and the equity is also quite strong. So that's how we are trying to build on Exo in the future. Exo, as a bar, has a good enough and strong enough presence in modern trade as well, and also in GT. We'll try and see that this brand grows in the liquid segment as well. Your other question. The question was on the- Yeah. Do you need another brand? Yeah. Yeah. Sorry? Yeah, my other question was that do you need a premium brand to offset the Pril impact despite kind of building up Exo? Not really, Harit. See, the premiumization that came in because the brand was like that, right, when it came to India, so we maintained that thing. Do we need a premium brand? Frankly, in a condition like this, in a market like this, and if you see India as a thing, there are fewer takers for premium brands and it is generally the mid. See, Exo is not at the lower end. It is at a good price point, and it is at a direct competition to the market leader. Now it's about why do you need a premium brand is the question, right? You will also have to create a premium brand. You have to spend more there, also in the same segment. As long as we have good enough differentiation in the brand, which we have. We have an enzymatic liquid, that is how we have differentiated with Pril. The performance is quite strong. So that is where we have a good positioning and this thing, and we'll be investing on that. Do we need a premium brand? Frankly, no. I think with a brand with a pricing like this, we'll be able to reach much wider and across the country much better, in a better way, where premium liquids don't give you that kind of reach. So that will be offset in the other way. Got it. If just a couple of more follow-ups, if possible. I think one was, did the agreement with Henkel kind of restrict you from increase the marketing spend or spending more on Exo even when Pril was around? Was there any kind of a tacit understanding that you couldn't dramatically build that up? Or was it just a fact that you already have a liquid brand, you have to kind of also look at the way your advertising spend works across brands, and you were just positioning it that way. That's one. The second question was on, when do you expect this arbitration exercise to kind of complete to understand what the valuation or what the consideration implications could be? Any broad timeline, while we can't hold you to it and you also wouldn't know, but any kind of broad timeline that you would have to kind of suggest, three months, six months, nine months? Okay. Harit, on the first point, we chose to go to the market in dishwash segment with Exo as our anchor brand in bar segment and Pril in the liquid segment. Both were completely distinct strategy chosen by us. Nothing was dictated upon us by anybody. So in that sense, all the decisions that we took with respect to Exo brand and Pril brand, they were our decision, and there were no specific restrictions, directions, et cetera, contractually between the two sides on treatment of Pril or our spend on Exo, et cetera. As far as the second question is concerned, as Jyoti has already put a disclaimer in her opening remarks, it is very difficult to comment or speculate on legal outcome, timing, when will it happen, how much time it's going to take. This is the first time that we have knocked the doors of Singapore International Arbitration Centre. The court will take its course, and we will present our point of view through our lawyers before the court, is all I can tell you at this stage. Okay. Just one last clarification is that what you are saying is it does not affect your overall distribution, right? I mean, even right now, I know you will be building up Exo and GT, et cetera, but on the liquid side, it does not really affect from you. You will not see a one quarter or so impact on other brands, one or two quarter impact on other brands because, say, Pril got out of GT or Pril got out of e-com and some kind of disruption. There is no carry forward impact on distribution on any of the other brands. That is the right way to think about it, right? On distribution. Of the other brands. As far as distribution muscle is concerned and our relationship with distribution, that is not dependent on one particular brand, which is Pril. Okay. So we have a plethora of brands, and our go-to-market strategy is built on the whole basket. As far as the implication is concerned, and I think in the earlier question you were talking about modeling aspect, et cetera. So we mentioned clearly that we did not continue with manufacturing, selling, and distribution of Pril and Fa with effect from June 1. As far as April and May months are concerned, yes, the manufacturing sales distribution were happening at its normal course. And I think till about the third week of May, we were doing primaries and thereafter the secondaries and tertiary were happening. And we are not having enough exposure on account of inventory, whether it is raw material, FG, et cetera, as far as Pril and Fa brands are concerned, as on May 31, 2026. Perfect. Thank you. Wish you all the best. Thank you. Thank you. Thank you. The next question comes from the line of Manoj Menon from ICICI Securities. Please go ahead. Hi, team. Good evening, and thanks for doing this call. I will actually restrict my questions or clarifications only to futuristic and your business strategy, because I think it's barely appropriate to ask about something which is sub judice, and to that extent, appreciate that you're doing this call. I only want to understand from a dishwash strategy with that. Let's say you have finite capital and you're allocating certain money behind Exo, certain money behind Pril. And you obviously had certain outcomes as well. Now that Exo, as I understand, has beaten Vim in certain markets, et cetera. I think in my mind there's not much doubt or clarification required saying that we can Exo, let's say, fill the gap from Pril, et cetera, from your point of view. The question here is, now that you have certain capital freed up, let's say money which is pending on Pril or let's say advertisements et cetera. Are you now thinking about categories beyond dishwash also, for example? Why restrict to say that if X goes, then you need a like for like replacement within the same category? That's question number one. Are you thinking in that direction? Point number two, does it also mean that you might be looking at inorganic also with a little more, I would say, urgency versus the past? Thank you. Yeah. Manoj, if I understood, your question is you're saying that whether do we need to compensate through an Exo Liquid or there are other categories that we are interested. Are we going to be there? The answer is that yes, we have few NPDs in pipeline, which you will see obviously coming up. Those will be there, like I said in the earlier question also, that we are trying to negate the gap that is going to be created by this exit. Okay? Through all our other brands and the newer NPDs that are going to come up. But do we need a liquid in a dishwash segment? Yes, we do need, because we earlier had it, and we had kind of kept it aside. We focused more on this brand for this segment and for Exo we concentrated on the bar segment. Now that area is open for us to be completely focused on that, and since the margins are also better there, we definitely would like to take that forward, and Exo is the best brand that can be taken forward. It stands on antibacterial platform. It is an enzymatic liquid that we have brought in the market, both in bars. In bars, it's the first enzymatic bar in the country. So there are a lot of good things happening on the brand. We are brought in innovation, and we keep bringing in innovation always. So it is the right thing to happen in a way that Exo has relaunched in the liquid format in the 25th year of the brand. While Exo will do what Exo has to do, there are other brands also that are coming up in the next few quarters where you will see the intent is that we try and minimize the gap and also build for the future. In terms of inorganic, yes. Yeah. As far as inorganic growth opportunities are concerned, Manoj, as you are aware, the company has been looking at various opportunities. Simply because Pril and Fa have departed wouldn't put us in a situation where we will take any rash decisions. Our fundamental approach to inorganic growth opportunities remain the same, and we are on a constant lookout for a right fit and- Opportunity. Yeah. Whenever it happens, we'll announce it to the street. Sure. Just to re-clarify what you stated in the opening remarks. Except for these two brands, all the other Henkel brands are subsidized? Correct. Super. Thank you. And all the very best. Thank you. Thank you. The next question comes from the line of Umang Shah with BanyanTree Advisors. Please go ahead. Hello, am I audible? Yes, you are. Yeah. Thank you for conducting this call. My first question was, will Henkel be running this brand post taking it back, or would they be selling it to somebody else? Umang, thanks for the question, but we will not be able to comment on Henkel's strategy, what they are going to do about it. We can only talk about how we are going to handle this situation. Okay. From our understanding, this was a two-player market to a large extent, then there were some private labels. With Pril going back to Henkel, do you visualize one more player on a national basis coming in this segment? One more player as in Pril coming back, you are saying is that? No, not Pril. A new brand, not Pril. New brand? Yeah. I really do not know about any other brand, but our focus will be on Exo, Umang. Right. The thing is, now, for the first time, we will be able to concentrate completely on this brand, on our own brand, and that is where our interest is. Competition has come and gone. Even in the bar segment, it is again largely a two-player market between the market leader and us, and then there are other players as well. There are few known dishwash liquids also from organized players, but they are not that big as of now. That is how the market is constructed right now. Whoever comes also, it will be one more competition. That is it. Got it. That focus will be on Exo, how we have built the bar. We will be continuously focusing on how to build the liquid segment as well. Right. Ma'am, correct me if my understanding is wrong. Exo was having very high market share in certain geographies, right? It did not have an all-India footprint. So in that context, the set of distributors that you will have for growing this brand would be different, right? No. Exo has very good market share in some of the states, but it is a pan-India brand. Okay. Sure. Distributors are there across the country. Just last clarification. What the bone of contention that we have with Henkel and that what we are advocating for is the purchase consideration that we are supposed to receive because of the investment that we made in Pril over the years, right? That is one figure that we are getting into litigation. Is that the right understanding? Not exactly. It is a slightly complicated case. The core issue is the proper treatment of end of term consequences under the license agreement framework, including the business transfer of Pril and Fa brand valuation consideration, associated transition matters, et cetera. So it is a combination of few issues. All right. Thank you so much for clarifying this. Tough time. I think you are well prepared. All the best. Thank you so much. Thank you. The next follow-up question comes from the line of Vishal Gutka with ASK Investment Managers. Please go ahead. Yeah. Ma'am, can you just elaborate on what's happening on Exo Liquid? I think a couple of months back you have launched. If you can just give a glance, actually, on the performance. How has been the performance so far? The growth rate factors are going much faster. What is happening? I understand it's a very short period since it launched, but distribution gap is yet to be told and how many outlets is it present as of now? Any qualitative comment will be really helpful. Thank you. Okay. Vishal, I will not be able to comment on that, the distribution and this thing, for the right reasons. From the time that we have launched, we have seen, frankly, a very good welcome from the distributors, from the market, from consumers as well. I hope that continues. Our effort is only to first place and then build on the brand, completely invest on the brand, and that will happen. It is not even a quarter completely, so it will be jumping into that way too early. I think we should wait for some time. Exo, as a bar, has always been a success story for us, and we built that. It is our number one brand in that sense. The same we want to replicate on liquid, I would say. We just have to be a bit patient, and that is what we will build. We cannot hurry up in this thing. Consumers will take their time to know that there is a liquid in their Exo and all of that warm up to that. We are trying all ground activities as well. I think we have to give that some time. Got it. Yeah. Okay. And NPD that you are talking about is across categories or it is for specific or across category definitely launching, but just was there any more NPD plans or it is across categories? It is across categories, Vishal. Got it. Thank you. Thank you. The next question comes from the line of Percy with IIFL Capital. Please go ahead. Hi. This is Percy Panthaki here. What I wanted to ask is that, as per the exit agreement with Henkel, should they choose to sort of take back the brand with them, how is the purchase consideration or how is, rather, the compensation structured? Is it structured as a sales multiple? Is it structured as a EBITDA multiple, or is it some pre-decided lump sum amount? If it is a sales or EBITDA multiple, is it sort of benchmarked to India FMCG or benchmarked to a global FMCG? Some kind of contours as to what the agreement actually is, that would be helpful. Percy, thanks for the question. See, some of the examples that you took while posing the question, I don't think those are explicitly mentioned in the agreement. However, as I said, and as Jyoti also said, we would refrain from commenting on any of the aspects related to contract, strategy, et cetera, for obvious reasons since the matter is before SIAC. So we would request you to kindly bear with us till the time the matter is decided. Okay, sir. That's all from me. Thank you. Thank you. Thank you. Ladies and gentlemen, we will take this as the last question for today. On behalf of ICICI Securities, that concludes this conference call. Thank you everyone for joining us, and you may now disconnect your lines. Thanks. Thank you.