Mumbai: Consumer packaged goods company Jyothy Laboratories Ltd appointed S. Raghunandan, former managing director of Reckitt Benckiser India, to the newly created post of chief executive and whole-time director.
The appointment of Raghunandan follows Jyothy’s acquisition of Henkel AG and Co. KGaA’s India subsidiary Henkel India Ltd last year.
Raghunandan, a graduate of the Indian Institute of Management, Calcutta, has about two decades of experience at various consumer packaged goods companies, including Paras Pharmaceuticals Ltd, Dabur India Ltd and Hindustan Unilever Ltd.
Jyothy expects him to lead the company as it goes “through a transformation following the acquisition of Henkel India”, chairman and managing director M.P. Ramachandran said on Wednesday.
In January, Jyothy promoted Ullas Kamath, who has been with it for 21 years, to joint managing director from deputy managing director. Kamath owns an 18% stake in Jyothy Fabricare Services Ltd, the fabric care retail business of Jyothy.
Ullas Kamath. Shriya Patil Shinde/Mint
With Raghunandan’s appointment, the family run business gets a professional manager and will soon also have a new structure to reflect this.
Jyothy and Henkel, which have merged their operations but will remain separate financial entities till March 2013, will have Raghunandan at the helm and the heads for the company’s three businesses—personal care, household care, and fabric care—will report to him.
“The new business heads will come in the second quarter of the fiscal,” said Kamath, while explaining that the three have been identified and will take their positions over the next two-three weeks.
Jyothy gets a large part of its sales from rural India and Henkel is largely an urban company.
“Raghunandan is an industry stalwart who would add value to the company as he has been with Hindustan Unilever, Dabur, and knows the ground realities and can build on brand strategies and know which brands to push in which markets,” said Shirish Pardeshi, executive director and co-head of research at Anand Rathi Securities Pvt. Ltd.
Jyothy reported a 21% year-on-year decline in net profit to Rs 27.9 crore for the March quarter. Net sales rose 40.3% to Rs 218.9 crore.
Operating profit margin, a measure of the company’s efficiency, stood at 16.6% as against 11.7% in the year-earlier quarter.
The growth was driven by the soaps and detergents business, which rose 46%. Home care, which includes mosquito coils, scrubbers and incense sticks, saw revenue rise 32.3%.
Henkel reduced its net loss to Rs 4 crore in the quarter from an Rs 18 crore loss a year ago. Henkel, whose brands include Margo and Fa (personal care), Pril (household care), and Henko, Mr White and Chek (detergents), saw its top line grow 10% to Rs.110 crore and its operating profit margin at 14.2% during the quarter, as against a contraction of 4.4% in the year earlier.
“Following this acquisition, we have streamlined our production facilities and distribution system and have started to reap the benefits of this integration,” said Ramachandran.
“The steps taken in the last three quarters seem to have worked and Jyothy has managed to grow its top line and increase its operating profits as well,” said Pardeshi.
Jyothy’s shares have risen by 7.42% since the start of 2012, underperforming the BSE FMCG index that rose by 18.26%.
On Wednesday, Jyothy fell 0.7% to close at Rs 192.45 on BSE.
The benchmark Sensex shed 0.49%.