BackPackaged products' demand can touch pre-covid levels if cases ease: Jyothy Labs
FMCG firms saw an unprecedented quarter - one that helped drive demand for cookies, floor cleaners and packaged tea but saw shoppers shun personal care and beauty products as they stayed put at home
PremiumNEW DELHI: Jyothy Labs Limited, that sells Margo soaps and Ujala fabric whitener, said demand for household mosquito repellants, and utensil cleaning products helped the company report a 2.3% jump in net sales in the June quarter, despite the disruptions caused by the protracted lockdown in the country in the wake of the pandemic.
The company expects demand for packaged consumer goods to return to pre-covid levels if localised lockdowns abate, according to a top executive at the company.
“Dishwashing brands did extremely well; while post-wash fabric care declined during the quarter as more people worked from home," Ullas Kamath, joint managing director, Jyothy Labs Limited, told Mint.
Its brand of mosquito repellents grew over 150% during the quarter. “And in dish wash (segment), we grew about 17% and that is good enough for us to offset the decline in post wash fabric whitener," said Kamath.
He added that while sales of post wash fabric cleaners took a beating as more people worked from home, demand for the product has picked up starting July. For the quarter ended 30 June, fabric care sales declined 23.8% especially as demand for its Ujala fabric whitener and Crisp and Shine cleaning products fell.
Kamath said while it was hard to predict demand going forward, if the country resists a second wave of infections and localised lockdowns, then demand for packaged consumer goods could touch pre-covid levels.
He warned that discretionary, non-essential spends could take a beating while consumers spend more on health and hygiene products.
In the fiscal first quarter, the company’s consolidated sales were down 2.4% at ₹433 crores, while net profit rose 33.8% to ₹50 crore.
Kamath said consumption of health and hygiene products remains intact especially as more people spend longer hours at home.
“The consumption has not come down, if you look across categories, consumption was more because people were sitting at home during the lockdown period, eating and washing more utensils. And again, we have seen house helps were not around and husbands were washing the utensils—the insight is very clear that men have used more dishwash product because they don't know how to use Pril or Exo, so they have used half more to clean dishes. So consumption has gone up for dishwasher—the category has grown," he said.
Earlier this year, the company launched hand sanitizers and face wash under the Margo brand.
It also started operations at its plant in Pithampur, Madhya Pradesh, in July to boost output of its dishwashing brands Pril and Exo.
Kamath said the plant will help service markets up north and expand production by nearly 40%.
India’s fast moving consumer goods makers saw an unprecedented quarter - one that helped drive demand for cookies, floor cleaners and packaged tea but also saw shoppers shun personal care and beauty products as they stayed put at home. In all, market researcher Nielsen expects India’s FMCG market to post flattish growth in the current calendar year.
Nielsen maintained that April and May dragged growth rates for the sector, with June seeing some signs of recovery. It expects the sector to post growth rates registered in the month of June going forward.
Kamath said that for Jyothy Labs, traditional trade channels were back to recording growth after seeing restricted operations at the beginning of the lockdown, but modern trade channels were slowing down.
E-commerce sales, on the other hand, doubled during the quarter, albeit on a lower base of 2-3%.
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