Jyothy Laboratories: Co ready to play in FMCG league

With an annual turnover of Rs 1,100 crore and a compounded annual growth of 24% in the last five years, FMCG company Jyothy Laboratories is emerging as an attractive bet in the small-cap stocks segment.

With the company concluding the merger of the loss-making business of Henkel India, which it acquired in 2011, it is likely to make the cut as a fast growing player in the consumer goods segment as it restructures the manufacturing and distribution networks and re-launches most of its brands.

Profitability should improve due to lower distribution margins and streamlining of manufacturing.

The company’s rise — from presence in just a single district in Kerala with one product ‘Ujala’, to a firm with apan-India presence with 10 solid brands, including Henkel India’s brands of international repute — has been impressive.

It now has brands in categories such as fabric care, household insecticides, dish washing, deodorants and laundry services. The management has provided guidance of a 20-25% growth in revenues and an operating margin of 14-15% for this fiscal.