JYOTHY LABS LIMITED — Call Transcript 2022

Nov 17, 2022

==> picture [178 x 50] intentionally omitted <==

To,

November 17, 2022

National Stock Exchange of India Limited

Exchange Plaza, Bandra Kurla Complex, Bandra (East), Mumbai – 400 051

Scrip Code: JYOTHYLAB

BSE Limited

Phiroze Jeejeebhoy Towers, Dalal Street, Mumbai - 400 023

Scrip Code: 532926

Dear Sirs,

Sub: Transcript of the earnings conference call for the quarter ended September 30, 2022

Pursuant to Regulation 30(6) read with Part A of Para A of Schedule III of the SEBI (Listing Obligations and Disclosure Requirements), Regulations 2015, Transcript of the earnings conference call held on Monday, November 14, 2022 for analyst/ investors to discuss the Un-audited Financial Results for the quarter and half year ended September 30, 2022 and the way forward, is enclosed.

Further, the aforesaid information is also available on the website of the Company at www.jyothylabs.com.

Kindly take the same on your record and display the same on website of the Stock Exchange.

Thanking you,

Yours faithfully,

For Jyothy Labs Limited

Digitally signed by Shreyas Shreyas Parag Trivedi Parag Trivedi Date: 2022.11.17 16:49:45 +05'30' Shreyas Trivedi Head – Legal & Company Secretary

Encl.: As above

==> picture [231 x 104] intentionally omitted <==

==> picture [140 x 40] intentionally omitted <==

“Jyothy Labs Limited Q2 FY2023 Earnings Conference Call”

November 14, 2022

==> picture [116 x 34] intentionally omitted <==

==> picture [114 x 26] intentionally omitted <==

==> picture [77 x 36] intentionally omitted <==

ANALYST: MR. MANOJ MENON - ICICI SECURITIES

– – MANAGEMENT: MS. M. R. JYOTHY MANAGING DIRECTOR JYOTHY LABS LIMITED MR. SANJAY AGARWAL – CHIEF FINANCIAL OFFICER - JYOTHY LABS LIMITED

Page 1 of 14

Jyothy Labs Limited November 14, 2022

==> picture [139 x 40] intentionally omitted <==

Moderator :

Ladies and gentlemen, good day and welcome to Jyothy Labs Limited Q2 FY2023 Earnings Call 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 ‘*’ then ‘0’ on your touchtone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Manoj Menon, from ICICI Securities. Thank you and over to you, Sir!

Manoj Menon :

Hi! Everyone, representing ISEC it is our absolute pleasure to welcome you to Jyothy Labs 2Q FY2023 results conference call. The company is represented today by M. R. Jyothy - Managing Director and Mr. Sanjay Agarwal – CFO. Over to the management for the opening remarks and we will open the floor for Q&A post that. Thank you.

Sanjay Agarwal :

Thank you Manoj and good afternoon everyone. We welcome you to the conference call of Jyothy Labs. We will be discussing the performance of the company for the quarter gone by September 2022 with all of you and we will follow up with the Q&A.

So overall, the consistent performance with a revenue growth of 12.6% and EBITDA grew by 20.8%. We have done well in spite of the inflation impacting general consumption. We continue to have the healthy double-digit growth of 12.6% for the quarter with a volume growth of 1.4%. This is on a good base of 16% growth in the same period last year. Also if you look at it on a two year and a three year CAGR basis we have been growing at a double-digit revenue growth. There has been consistent seven-eight quarters of doubledigit for us. Even we analyze the business or I would put in the other way if we analyze the business ex HI and our value growth is at 17.8% and a volume growth of 5%. we have been able to strengthen our core business with focus on distribution and brand investments. All of us are aware about high inflationary pressures which are there on the household budgets.

With regards to the specific commentary on channel performances, we have witnessed stable growth across all channels now and we have been focusing on our distribution platform and also focusing on sales of our existing product portfolio in newer geographies and that has resulted us in strengthening our market share across all our brand categories.

Regarding performance of our different business categories, the demand for detergent, dish wash and personal care category has been stable. However due to lesser rains in our core markets of north and east of India, this has impacted our HI business. There has been a sequential improvement in margins, some of the raw material prices have soften but a large

Page 2 of 14

Jyothy Labs Limited November 14, 2022

==> picture [139 x 40] intentionally omitted <==

number of them is still high and continue to keep pressure on the margins. So we will have to see how going forward the raw material prices behave.

Separately, both urban and rural continue to do well. our rural demand has been impacted due to inflation as rural consumers are more cautious than urban consumers in this time of inflation but for us we see a good potential or a strong potential for us in the rural markets hence our focus on our rural franchise.

Moving onto the key categories performance. Fabric care is doing well we are at 33.7% growth this quarter. We have taken extensive drives on our detergent category and focused on mid price detergent brand Mr. White, More Light they have accelerated our growth on a pan India basis.

In Ujala fabric whitener as we updated last time we have launched a new media campaign staring superstar Ms. Tapsee Pannu and digital campaigns have also been rolled out across all the key social media platforms, which are accelerating our brand awareness.

Also in the main wash category all our detergent brands even the premium end Henko, Henkomatic and liquid as well as the Ujala IDD liquid, the refill pouches they all have received very good consumer attention.

In dishwash category both Exo and Pril continue to do well and we have been gaining market share there. We have undertaken some focus drives in Exo to connect with the young children and consumers on the theme of how much indispensible Exo is in their lives. We continue to invest in both the brands with involvement in few high impact properties which have helped us to accelerate the sales on a pan India basis.

In HI categories, the category degrew by 8%. Our strong markets for Maxo are North and East of India and they received lesser rains hence the impact more for us this quarter resulting in a negative growth. Overall we remain positive on this category and we will continue to focus on the liquid format of the business.

Finally our personal care segment which is Margo franchise it has again delivered a doubledigit growth. Neam based Margo portfolio for soap continue to be our consumer preference for this category. This category has seen frequent price increases due to higher input prices however as we see recently the soap noodle prices seem to have soften so we expect the margins to improve from here on.

In summary, we continue to focus on our volume led growth and continue to win market share and build scale in our operations. We see great potential for all our products and we

Page 3 of 14

Jyothy Labs Limited November 14, 2022

==> picture [139 x 40] intentionally omitted <==

will be focusing on distribution, continue to increase our investments behind the brand and thereby getting across to a larger consumers gaining market share and strengthening our position in the states where we have potential to gain further market share.

We believe volumes will gradually grow from here and sequentially we should see improvement in margins and we will continue to deliver double-digit growth.

With this, I finish my opening remarks, and we are happy to answer any questions or clarifications you may have. Thank you.

Moderator:

Thank you very much. We will now begin the question and answer session. The first question is from the line of Manoj Menon from ICICI Securities. Please go ahead.

Manoj Menon:

Jyothy and Sanjay brilliant performance, given the market context in terms of demand etc., super congrats to you and team for that upfront. Now a couple of questions actually. One on detergent specifically, just wanted your top level thoughts, let us say for a 30% plus revenue growth performance the volumes seems to be holding up for you and also for Unilever as per the comment from both the companies. What I am trying to understand the consumer behavior here for these sort of price increases are we to understand that there is no adverse effects of price velocity whatsoever. Is that the way to think that consumers are not moderating usage at all or is it a case that there is significant consolidation which is happening for a few players which is what we get to see.

M. R. Jyothy:

In our portfolio we have brands at different price segments. So you see that the lower unit packs of Rs.10 and the mid price segment are doing well for us and also for us the reach of these brands has been better compared to the last few years. So for us distribution gain and also the acceptance of maybe some bit of downgrading on our premium products also would have happened is our guess but if the Rs.10 pack and in the big stores in the modern trade store the bigger packs and somehow the consumer has found a way to play around the price equation, the price volume equation so that is on detergents.

Manoj Menon:

If I understood correctly there is still some volume moderation but probably it is not visible because we are only talking about the top few players.

M. R. Jyothy:

Yes.

Manoj Menon:

Does this largely hold good for let us say in other home care categories like a dishwash in which you are presenting because maybe not of the same quantum of price increases index but that also would have seen input push.

Page 4 of 14

==> picture [139 x 40] intentionally omitted <==

Jyothy Labs Limited November 14, 2022

M. R. Jyothy:

Yes, so for us in dishwash the input prices have not gone up relatively as sharp as compared to fabric care. Though the input materials have gone up we have not taken price increases to that level like that in fabric care and for us again the low unit packs continue to do well and that is how we have been able to sustain the volume growth both in urban and rural.

Manoj Menon:

The second question is on Maxo. Two sub questions there. One I am sorry if I missed that comment earlier about the performance of liquid vaporizer salience etc., in the overall Maxo. Second question on Maxo is if you could talk a bit about the geographical expansion attempts or efforts execution which you are actually doing in Maxo outside of the strong market of East for that brand.

M. R. Jyothy:

Yes, so for us right now coils are 60% and LVs are at 40% and this time both the categories when the seasons doesn’t play both these categories do get affected we are more skewed in the north and the east compared to the rest of the of the geographies, larger sales comes from geographies and this time if you would have read few reports on rain and things there was heavy rain fall and the whole thing on Mosquitos is if you have too much of rainfall the mosquito now they gets washed way and if there is lesser rain fall then it does not help in the breeding of mosquitos. So if you see right from Jan, Feb onwards the season has not played really well this year but we are still hopeful going ahead the season should come back once in so many years it may happen and we are seeing this after really, really long time this kind of playoff season really affecting, the brand is on a good traction among consumers, we had kind of reached a good level and we also have plans to grow the liquid category. I guess it is a temporary phenomenon and it should sooner come back.

Manoj Menon:

The HI category segmental performance is still close to zero maybe it is just not an appropriate quarter to do any sort of meaningful analysis given the revenue. Sanjay is it a significant operating leverage angle or a deleverage angle sitting there or how do we think about the trajectory of profitability in Maxo or HI rather.

Sanjay Agarwal:

Yes, so profitability is one key area which we have been focusing on and that was going to get driven through the LV side of the business. But this quarter as we have seen I mean the sales have not picked up but they have been quite negative. So going forward we hope as Jyothy just mentioned that the season should go fine and then we should be on the path to profitability soon.

Manoj Menon:

One last thing on Maxo I am sorry for pushing the envelope a bit for which let us say 1/3rd 40% of your business is from LV how is it possible to actually have, is it basically then are we saying that you are selling below marginal cost on the rest of the portfolio which is largely coil.

Page 5 of 14

==> picture [139 x 40] intentionally omitted <==

Jyothy Labs Limited November 14, 2022

Sanjay Agarwal: I think for a long period of time we have mentioned that if we exclude the media spend then yes the category remains positive for us but since we want to focus on the LV side of the business so there have been over investment to that extent and when you look at the EBIT margin for the category you see a negative number there. We are seeing those investments have giving results for us. So it will take some time for us to get stabilized at a decent LV number and then the whole profitability will kick in.

Manoj Menon:

Sure sir thank you. I will step back in the queue. Thank you so much.

Moderator:

Thank you. Next question is from the line of Percy Panthaki from IIFL. Please go ahead.

Percy Panthaki: My first question is on the fabric care business especially the detergents. I am assuming that the detergents portfolio within fabric care has actually grown at a higher rate than the overall fabric care business and if my assumption is correct, I just wanted to understand what has led to this sudden spurt in growth I mean it was not so high in the last few quarters. So is there some sort of adjustment in the pipeline that we need to do to understand what is the underlying sustainable growth in this for the next couple of quarters.

M. R. Jyothy: The thing is it is not just detergent for us as Ujala Supreme also has grown in double digits we also have a Crisp and Shine which have got beaten badly during the COVID times that has done well so it is not just detergents it is the post wash also which has contributed to the overall fabric care. detergents yes have done well the lower unit packs have done well the larger packs in big stores have done well so it is across the geography, across brands we have been doing really well and have been maintaining the market share more or less.

Percy Panthaki: Is there any difference in the primary versus secondary this quarter in fabric wash.

M. R. Jyothy:

There is nothing, secondary primary are same.

Percy Panthaki: So in that case, what I just wanted to understand is that this kind of growth that we have shown if there is no one off or anything is that something that same percentage growth Y-oY is it sustainable over the next couple of quarters at least and if not what is the reason for the same.

M. R. Jyothy: See we will definitely see a double-digit growth and we are happy that our premium sales also have bounced back and it has been consistently doing a double-digit growth as well. So right now I can only say that we continue to wish that all our efforts are behind the brands where we have been investing behind the brands and our effort is definitely to do better I am not sure of the kind of percentage that I can put on this thing, but definitely a doubledigit growth is what we are looking at.

Page 6 of 14

Jyothy Labs Limited November 14, 2022

==> picture [139 x 40] intentionally omitted <==

Percy Panthaki:

Secondly on the personal care portfolio on a Y-o-Y basis I am sure there is a significant amount of price increases sitting in that despite that the sale growth is only some 10%, 11% which means that volumes might be negative and despite being such a small player, I mean we have so many drivers of growth, levers of growth would not you say that the growth here should have been much higher.

M. R. Jyothy:

See yes like you said there have been several price increases which have happened while that has happened our volumes have not dipped. I would say it is somewhere around 1% sort of a thing. So it is not negative it is slightly better than flat but because of consistent price increases, obviously the consumers I think overall in general it has definitely taken some impact, but going forward if things are better we would pass on the advantage to the consumer and we will definitely see volume improvement there.

Percy Panthaki: So my impression was that in the soaps category the Y-o-Y pricing is in double-digit so is my impression wrong or is it that in Margo you have sort of consciously taken lesser price increases than the industry.

M. R. Jyothy:

No we have taken price increases literally forgot how many rounds of price increases have happened definitely so if you are a consumer you go to a shop you would see Margo at many different price points that definitely has created some sort of issues also in the sense from a consumer point Margo available at some two, three different price points which has actually moved definitely that has impacted the volumes but going forward we do not see any more price increases happen rather we would pass on any advantage that comes out of softening of the raw material. So yet to happen but we will see that will be passed on.

Percy Panthaki: Last question from me for next fiscal, what kind of EBITDA margins would you be targeting as a company overall.

Sanjay Agarwal: Percy, as this quarter is we have done some sequential improvement in the margins. Very tough to put a number for now given the SKU mixes we have and the raw material prices the way they are behaving. For now we can only comment that yes sequentially this should be improve and we would love to go back to our earlier margin profile of 15% or about but we will have to wait for that.

Percy Panthaki:

Thank you.

Moderator: Thank you. The next question is from the line of Kaustubh Pawaskar from Sharekhan by BNP Paribas. Please go ahead.

Page 7 of 14

Jyothy Labs Limited November 14, 2022

==> picture [139 x 40] intentionally omitted <==

Kaustubh Pawaskar:

Thanks for giving the opportunity. My question is again on the detergent front. I just want to understand is it because of the down trading our premium and low price products gained this quarter and that is why the growth in detergent segment was much better in this quarter and that might be not the case once this inflationary scenario turn down and growth will normalize over the next maybe two to three quarters.

M. R. Jyothy: See for us it could not be completely the downgradation that you are talking about we have also increased our distribution, we have reached many more retail outlets and it is also the lower SKUs the lower unit packs that has done well and it is different for different brands across geographies so it will be too early to conclude whether it is only down that has happened, but we will going forward try hard to do maintain the double-digit growth in detergent business.

Kaustubh Pawaskar: What is the lower unit packs contribution for our detergents segments for fabric care and what will be is for the entire overall product portfolio for us.

M. R. Jyothy: Yes it is around 35%.

Kaustubh Pawaskar: For detergent or for the entire product.

M. R. Jyothy: No for detergent.

Kaustubh Pawaskar: My second question is on the margins. So as this first half we have seen margins to be at around 11% to 12% we have heard from most of the companies they are expecting margins to improve sequentially from quarter three and by Q4 they are expecting their margins to come back to their historical level so for us are we looking at the same trend or it will take some time for us to recover back to around that 15%, 16% kind of margins.

Sanjay Agarwal: We also explained the similar trajectory to happen for us as well where in the Q4 onwards sequentially the margin should improve. we were expecting sort of raw material prices to soften but they have not been in the last few months so they have fallen off from the peak but they still remain high and so we are also on the same school of thought but let some early signs confirm that.

Kaustubh Pawaskar: One last on the distribution. Currently what is our distribution reach and by maybe end of 2023 and 2024 where are we targeting our distribution to be.

M. R. Jyothy: See essentially we reached 1 million outlets directly and overall around 3 million in the both direct indirect put together we have our internal targets obviously would want to increase the distribution much more.

Page 8 of 14

Jyothy Labs Limited November 14, 2022

==> picture [139 x 40] intentionally omitted <==

Kaustubh Pawaskar: Thank you.

Moderator: Thank you. The next question is from the line of Amit Purohit from Elara Capital. Please go ahead.

Amit Purohit: Thanks you for the opportunity and congrats for the good numbers. Sir just want to check on the liquidity condition in the market especially when I look at both trade receivables for us has been higher even if I look at from pre COVID or during COVID also from there also it has gone up are there any challenges the distributors are facing or…

Sanjay Agarwal: See this quarter for us has been slightly higher one because of the institutional business, nothing alarming, but marginally higher. what you mentioned about the distributors see when they are also facing these inflationary pressures and for the working capital they have to deploy more if the goods what they are selling is more by 10% or 20% then it also blocks an equal amount of working capital at their end. We have not seen any pressure from distributor but yes the overall business cycle in which they all operate where the volumes are not growing definitely impact them but nothing on the receivables for us the entire general trade business is on cash and carry.

Amit Purohit: On the inventory side this is largely because of the high cost inventory right.

Sanjay Agarwal: Yes, the high cost of inventory, higher level of scale of operation from last year and to some extent on the HI inventory which is in coils. obviously one has to make but if it does not pick up then obviously it goes on the next seasons. So combination of these factors has been for the inventory rise.

Amit Purohit: Lastly how has been the demand now in HI because we understand that there was a delayed monsoon. So hence October would probably a good month is that what you also experience if you could give.

M. R. Jyothy: As of now it is looking fine but too early to say that. Amit Purohit: So, I mean, fine in the sense are you able to regain the loss thing or it is just business as usual.

M. R. Jyothy: No that is a huge loss that has happened. See in this category, we have two big seasons that is usually the Jan quarter and the Feb, March the JFM quarter we saw the two big quarters so if you miss these quarters in terms of season then obviously it is difficult to catch upon that but having said that we are still hopeful that maybe this year is an aberration and the season come back next year.

Page 9 of 14

Jyothy Labs Limited November 14, 2022

==> picture [139 x 40] intentionally omitted <==

Sure thanks a lot that is it from my side.

Amit Purohit: Sure thanks a lot that is it from my side. Moderator: Thank you. The next question is from the line of Manoj Menon. Please go ahead.

Manoj Menon:

Sir three different questions over here. One there is a comment in your presentation about the demand conditions being positive which was very pleasing to see and you appear to be an outlier in terms of saying that the demand conditions are great so when I look at your performance of 5% volume growth which is definitely industry leading is it just a case of you actually executing better or you do think actually that the conditions are positive and you have tailwinds etc., and if yes please elaborate that will be helpful.

Sanjay Agarwal: It is basically when you look at our business the efforts which have been put in which is brand investments, the distribution drive, the expanded distribution and being able to have a very balanced portfolio across sub categories and price points so I think when we put all these things together is we see the business doing okay for us or well for us. there are challenges no two doubts about it but as we move along the festive demand has been okay we are seeing some good pickup partly offsetting the inflationary headwinds so we are seeing all these things in this macro perspective and we hope that for our business for the portfolio we have we should be able to deliver our target of double-digit growth.

Manoj Menon: Sir just one follow up on maybe not actually I will ask you separately on working capital so there is some increase in working capital if you could just help us understand is it raw material finished goods what exactly is the, or is it just a seasonal thing.

Sanjay Agarwal: I think there is a similar question before from Amit. The working capital days have marginally increased because of slightly higher inventories, receivable is more on the institutional business and inventory is on the higher scale and higher cost of raw materials and FG and to some extent marginally on the HI inventory as well but these all will be fine we do not expect it to be at these levels for the long period of time we have been managing in between 20 to 22 days so hopefully we will be in that range soon.

Manoj Menon:

Third some qualitative and possibly quantitative performance commentary about Henko some detailing if at all possible would be helpful. What I am trying to understand is let us say if I look at the Unilever commentary it is very clear that it is premium detergents within that Surf within that the LUP. So there is a level of YV analysis which tells us that what is the driver for growth. So fair to say that premium at least as per Unilever appears to be outperforming in other segments of growth. Your drivers of growth is mid segment and you do have a key brand for position in Henko there is attempts made in the past significant attempts rather with investments etc., to rejuvenate Henko. Now as a consumer when I observe at least it is a perception maybe an anecdotal perception that it is all Surf and not

Page 10 of 14

Jyothy Labs Limited November 14, 2022

==> picture [139 x 40] intentionally omitted <==

much of Aerial or limited Henko to be seen. So just some color on where we are in the journey with Henko qualitatively and quantitatively will be super helpful.

Sanjay Agarwal: So Henko has been doing good and as you know it is on the premium side of it and we launched the Matic which has done well, it is a pan India brand, seeing the demand trends or the consumer preference for liquid the liquid was launched. So as of now yes in our overall portfolio this is at the premium end of the business obviously more sales in metros and modern trade type of channel and is doing well. we have brand ambassador Kajal Agarwaal and things have been doing well for us so I think we will restrict our comments to that.

Manoj Menon:

Now one last thing and I will get back in the queue again. When I look at the ad spends 86 Crores versus 83 Crores last year should I think of ad spends the way you are looking at it in terms of absolute or because of the revenue growth being so strong price led there is significant like let us say 100 odd bps reduction so should I look at it as a percentage of revenue how are you looking at or it is it more like an absolute modeling which we are doing.

Sanjay Agarwal: It has to be looked at absolute and when we draw our yearly AOP, obviously one looks at a percentage basis also but as of now I think in the environment in which we are living I think we are doing a fair degree of brand investments.

Manoj Menon: One quick follow up on this is, is it suffice to say that in all the categories you are SOV/SOM is favorable.

M. R. Jyothy:

Yes, more or less it depends on geography, regional and Hindi speaking it would differ but more or less we are there.

Manoj Menon:

Sure thank you good luck.

Moderator: Thank you. The next question is from the line of Pathanjali from Mirabilis Investment Trust. Please go ahead.

Pathanjali: Congrats on the results. I just wanted to know what is our volume and value growth for the detergent business or the fabric care business as a whole.

Sanjay Agarwal: Volume growth is around 20% odd and the balance will be the price.

Pathanjali: Okay is that right 20% odd is that.

Page 11 of 14

Jyothy Labs Limited November 14, 2022

==> picture [139 x 40] intentionally omitted <==

Sanjay Agarwal: Yes.

Pathanjali: Any plan for NPD for the current year because I think last year we did not do much NPD anything in the pipeline.

M. R. Jyothy: Yes, there are something in the pipeline but it is a part of the next year. Pathanjali: So nothing for the current year is that right. M. R. Jyothy: Current year in the beginning of the year we had launched Henko liquid, liquid detergent and we will be launching and then doing our investments on that, reach a certain scale and then launch the next. So that is our principle so we have launched Ujala IDD liquid detergent and Henko liquid detergent just about six month’s back.

Pathanjali: And I think based on our inventory levels it will take us about two months for us to roughly get on any cost benefits that come from softening commodity prices is that right.

Sanjay Agarwal: Yes that is right.

Pathanjali: Okay Sir thank you that is it.

Moderator: Thank you. The next question is from the line of Shreyans J from Svan Investments. Please go ahead.

Shreyans J: Just wanted to understand, when you talk about LUP so our understanding is LUP’s gross margins are significantly lower than your normal larger pack. But still if you look at this quarter in spite of selling almost LUPs in most of our product categories we have been able to hold the gross margins. So is the understanding correct here.

Sanjay Agarwal: At the company level when we have LUPs, one manufacturing is our in-house so does not impact us that much but we see LUPs more as our investment and our way to get into new consumers. So we see as a good outcome for long term if we are able to increase our LUP share it give good result in a long-term and margin level it does not impact that much at the category level.

Shreyans J: The second question is would we be largely done with the high cost RM or do you think like Q3 would be the last quarter where we will be able to use that and post that you will see some relief in your margins or improvement in the margins.

Sanjay Agarwal: It atleast takes a quarter or two for actually get the new pricing comes in but even if we look at it this point of time, prices of soda ash, some of the raw materials are still at a very

Page 12 of 14

Jyothy Labs Limited November 14, 2022

==> picture [139 x 40] intentionally omitted <==

elevated levels. So too early to call it that they have come off from the peak but they are still at high levels for some of the raw materials some of them has come off your palm oil price have come off but rest are still at the same levels.

Shreyans J:

But just to get a sense in the margins do you think we have reached the turf in some sense I am not asking for any guidance, but just to get a rough idea of where we are in and there is only one way up from here on.

Sanjay Agarwal:

Yes, we will definitely hope that margins go up one way but life is generally not that way . so we hope things will improve from here on and that is what we are expecting this quarter sequentially margins have gone up and we hope things will fall in the same trajectory or the upper trajectory only.

Shreyans J:

Just my last question. Sir just broadly fundamentally I just wanted to understand we are seeing growth of about 20% in volumes in fabric care whereas soap you just said 1% volume so what is the psyche of a customer like is he not willing to buy soaps or rather spend on fabric care or do you think it is more about competition in the soaps category where Margo faces a lot of challenges from other brands and it becomes difficult to sell those products in that category. So just trying to understand is it that the competition is impacting or is it that the customer has not been actually able to purchase soaps at a cost of fabric care.

M. R. Jyothy:

The thing is the number of brands in personal care that is the soaps category it is way too many and we have a single brand that is Margo. While for us in detergents we have multiple brands and we have pockets of strength when you map India we have different brands are doing well in different pockets of the country so it is a summation of that, that is working for us.

Shreyans J:

Alright that is all thank you so much.

Moderator:

Thank you. The next question is from the line of Bhakti Thacker from Investec. Please go ahead.

Bhakti Thacker:

Hi this is Bhakti Thacker. Thank you for giving me the opportunity. In dish wash we are seeing some lower growth versus the past few quarter trends that we have seen is the volume growth positive here and any specific reason for this lower growth versus historical level.

Page 13 of 14

==> picture [139 x 40] intentionally omitted <==

Jyothy Labs Limited November 14, 2022

M. R. Jyothy: For us generally the Jan quarter is the biggest quarter and last year we had a heavy base on it while we talk about our dish wash we have gained market shares as well so it is temporary, both the brands are doing very well.

Bhakti Thacker: And my second question was on tax rate. So what would be our tax rate for this year and the next year.

Sanjay Agarwal: We can assume around 16% to 17% on an annualized basis.

Bhakti Thacker: Last a bookkeeping question so for us how big would be Ujala Supreme contribution to our detergent segment.

Sanjay Agarwal: Which one.

Bhakti Thacker: Ujala Supreme.

Sanjay Agarwal: We do not give any specific brand wise number so we will leave it at that.

Bhakti Thacker: I am not asking for the growth for this quarter I am just asking the sales contribution from this brand to our overall sales or even detergent sales.

Sanjay Agarwal: So overall at company level, Ujala Supreme will be around 10% odd.

Bhakti Thacker: Got it thank you so much.

Moderator: Thank you. Ladies and gentlemen that would be our last question for today. I now hand the conference back to the management for their closing remarks. Thank you and over to you.

Sanjay Agarwal: Thank you very much and if there any questions please reach out to us or to ISEC team and we will be more than happy to answer any questions you guys have and thank you once again good bye and see you next time.

Moderator: Thank you very much. Ladies and gentlemen, on behalf of ICICI Securities that concludes this conference. Thank you all for joining us and you may now disconnect your lines.

Page 14 of 14