MOSL: THE CORNER OFFICE (JYOTHY LABORATORIES) — Brightening the portfolio-Valuations remain fair, though

THE CORNER OFFICE (Jyothy Laboratories) — Brightening the portfolio; Valuations remain fair, though

Mr Ullas Kamath, Joint Managing Director

Mr Ullas Kamath is a qualified Chartered Accountant and Company Secretary. He has topped it with a Degree in Law and has attended the Advanced Management Programme at Wharton Business School and Harvard Business School.

Under his leadership, the company has diversified and become a multi-product FMCG company. He has spearheaded the successful setting up of Fabric Spa and the Henkel acquisition. He has also won the CA Business Achiever Award - SME category – at ICAI Awards 2008.

We met Mr. Ullas Kamath, Joint Managing Director of Jyothy Laboratories (JYL), to understand the company’s strategy to drive growth over the next few years. Key takeaways:

Multiple drivers in place to drive medium-term growth

1. Ujala Crisp and Shine: This product fits well into JYL’s niche and innovative product portfolio. It was launched initially in Kerala, with the potential to reach a customer base of over 30m people. JYL initially targets to make Ujala Crisp and Shine an INR1b sales product in south India, and then take the brand to other states – but one state at a time. It targets a turnover of INR2.5b from this brand over 4-5 years.
2. Personal care: JYL aims to step up its presence in the Ayurveda space with its brands Margo and Neem (both acquired from Henkel’s portfolio). Margo reaches around 1m outlets, mostly in east and south India. Encouragingly, the recent advertisements on Margo have able to create good top-of-mind awareness. Over the last four years, JYL has grown Margo from an INR600m to an INR2b brand. JYL aims to generate revenue of INR5b from its personal care portfolio (Margo + Neem – a product that is at a premium to Colgate Dental cream, but generating revenue of only INR300m, half of which are from exports to Malaysia). Margo alone is expected to contribute INR3b of sales over the next 2-3 years. Its positioning is unique with 15% of the ingredients comprising of neem oil, a level that has been maintained across its history. Management is looking at extending the Margo franchise to face wash and hand wash. Margo commands 55-60% gross margins, which will only expand as JYL enters more premium products. In fact, management’s targets at least 50% gross margins from all of its new products across categories.
3. Hair care: JYL is still in the R&D phase in its hair care segment. It will be looking at the premium hair oil space first, with a product similar to peer brand Indulekha.