Note ban limits Jyothy Lab’s Q3 net profit growth at 6.6%
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Mumbai: Jyothy Laboratories Ltd posted a lower-than-expected net profit in the quarter ended December, hurt by the demonetisation of high-value currencies that crimped sales growth.
The maker of Ujala liquid fabric whitener reported a consolidated net profit of Rs21.51 crore in the December quarter, up 6.6% from Rs20.18 crore in the year-ago period.
The consumer goods company’s net sales were up 3.1% at Rs399.53 crore, compared with Rs387.66 crore last year. Sales growth in volume terms was 3.6%.
A Bloomberg poll of 10 analysts had estimated that Jyothy Laboratories would post a quarterly net profit of Rs29.40 crore on revenue of Rs374.6 crore.
“The business during the quarter was impacted by the demonetization drive. While wholesale trade was at total standstill for two weeks, our share from modern trade increased significantly as traders introduced a slew of cashless options for consumers. As we enter the last quarter of FY17, the demand situation has started getting back to normal,” M.P. Ramachandran, chairman and managing director of Jyothy Laboratories, said in the company’s earnings statement.
On 8 November, the government banned old Rs1,000 and Rs500 currency notes to weed out black money.
Jyothy Laboratories’ mainstay fabric care segment performed well, but revenue from household insecticides and personal care segments declined 15.2% and 0.8%, respectively. The fabric care segment had sales of Rs172.9 crore, up 10.4% on year.
The company said it plans to take selective price increases in the March quarter to boost margins and continue investments behind brands to lift growth.