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Jyothy Labs Q1 net up 57 per cent, budgets Rs 1,000 crore for acquisitions
FMCG firm Jyothy Laboratories, which reported a 57.1 per cent rise in standalone net profit for the first quarter, is scouting for acquisitions in FY20, and has earmarked Rs 800-1,000 crore for this while concentrating on organic growth this fiscal, a top company official said.
"FY18-19 we just want to concentrate on organic growth and FY 19-20 is the year we should be focusing on inorganic growth. Like any other progressive company, we are looking, and inorganic is also another good way to grow, which we have seen after acquiring Henkel," Ullas Kamath, joint MD, Jyothy Labs told PTI.
It is looking at some regional brands, and he said there is nothing in the pipeline at the moment.
"I think Rs 800 to 1000 crore is what we can comfortably go at (for acquisition), beyond that would be stretching because the company is now having a debt of Rs 250 crore. Even if we go with an acquisition of Rs 800 crore, we should be able to manage very nicely," he added.
Jyothy Labs had bought 50.97 per cent stake in Henkel India in 2011.
The company has reported a 57.1 per cent rise in standalone net profit at Rs 32.38 crore for the first quarter ended on June 30 backed by growth across all its segments and a good rural growth.
It had posted a net profit of Rs 20.61 crore in the April-June period of 2017-18 fiscal.
Kamath said it has grown across the segments and geographies and also added that the quarter had the advantage of a relatively low base from last year, when GST was introduced.
Fabric care which contributes 44 per cent has grown by 14 per cent, dishwash which is 33 per cent of business has grown by 28 per cent. Household insecticide which is 8 per cent for the quarter has grown by 38 per cent, while its personal care soap brand Margo, which is 13 per cent of the business grew by 28 per cent during the quarter under review.
"The monsoon has been great, and the minimum support price of the government has been taken positively and (goods and services tax) GST council has also reduced most of the categories under 18 per cent now, so that will also drive the consumption. For the entire fiscal 2018-19, we should grow 15 per cent on topline," Kamath said.
Its total income in the quarter under review was at Rs 407.44 crore. It was Rs 363.61 crore of the corresponding quarter of the previous fiscal, Jyothy Labs said.
Rural, which is 45 per cent of consumption for the company, accounted for two-thirds of its business growth during the June quarter.
The company which is the maker of Ujala fabric whitener, said sales for the quarter ended June 30 is net of GST.
"However, sales till period ended June 30, 2017 is gross of excise duty. Accordingly, the amounts are not fully comparable," it added.
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