This article first appeared on GuruFocus .
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Revenue Growth (Excluding Pril and Fa):8.1% value growth and 5.3% volume growth year-on-year.
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Gross Margin:38.5%, down 950 basis points year-on-year.
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EBITDA Margin:8.4%, down approximately 820 basis points year-on-year.
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Employee Cost:11.4% of revenue, compared to 11.5% in the same quarter last year.
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A&P Spend:6.5% of revenue, compared to 7.8% in the same quarter last year.
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Other Expenses:12.2% of revenue, compared to 12.1% in the same quarter last year.
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Fabric Care Segment:Over 14% value growth and 10% volume growth during the quarter.
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Home Care Segment (Excluding Pril):2.4% year-on-year growth.
Release Date: August 12, 2026
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
Positive Points
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Fabric Care segment delivered strong growth with over 14% value and 10% volume growth, driven by double-digit growth in detergent powders and high growth in liquid detergents.
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Modern trade, e-commerce, and quick commerce channels continued strong momentum, growing at 25-30% and becoming key drivers for premium product adoption.
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The newly launched bio-enzyme-based Exo liquid dishwash has shown encouraging early progress, with the broader Exo franchise growing in mid-to-high single digits in value and double digits in volume.
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The company maintains a strong balance sheet with approximately INR 850 crore in net cash, providing financial flexibility for strategic initiatives and potential M&A.
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Management is focused on cost optimization, supply chain efficiencies, and value engineering, with plans to step up A&P investments to support long-term sustainable growth.
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The company is actively working on diversifying away from crude-linked raw materials and developing new high-margin products, including potential entries into new categories like beauty and personal care.
Negative Points
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Gross margin declined sharply by 950 basis points year-on-year to 38.5%, and EBITDA margin fell by 820 basis points to 8.4%, due to abnormally high input cost inflation and insufficient price increases.
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Urban demand remained subdued, with cautious consumer sentiment and higher household expenses pressuring discretionary spending, leading to muted general trade growth.
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The exit of the Pril brand (effective May 31, 2026) negatively impacted the dishwash portfolio, and the company faces uncertainty regarding potential re-entry by Henkel, with the matter now before the court.
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Personal care segment performance was subdued due to price increases and transient supply chain disruptions, with emerging input cost pressures from rising soap noodle prices.
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Raw material and packaging costs are unlikely to correct immediately, with higher-cost inventory flowing through Q2, and margin recovery is expected to be gradual, with H2 FY2027 expected to be better than H1 but still under pressure.
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The company's heavy dependence on crude-linked inputs (90% of business) makes it vulnerable to commodity volatility, and competitive pricing actions have limited the ability to fully pass on cost increases.
Q & A Highlights
Q: What is the total price increase taken since the start of the commodity crisis, and why is it lower than peers like HUL and GCPL? A: CFO Pawan Kumar Agarwal stated the total blended price increase is about 4% to 4.5%, with 3% flowing through in Q1 and the rest visible in Q2. Chairperson Moothedath Jyothy clarified that the pricing is a result of competitive actions in certain SKUs, and the company is at par with competition at the SKU level. The CFO added that price increases vary by segment, with personal care seeing a 9% to 10% hike, while other segments saw 4% to 5%.
Q: Can you elaborate on the gap between cost inflation and pricing, and which segment is most impacted by unrecovered inflation? A: CFO Pawan Kumar Agarwal explained that Fabric Care and Home Care, which constitute 90% of the business, were hit by abnormally high input price inflation. He noted that Fabric Care saw a price increase of closer to 5% on a portfolio basis, but the dishwash segment remained highly competitive, limiting pricing power.
Q: What is the future margin trajectory, and can margins recover without crude price deflation? A: CFO Pawan Kumar Agarwal stated that the goal is to swing back to historical margin levels, but a large portion of that recovery is linked to crude prices. He emphasized that margin recovery will be gradual and progressive, with H2 expected to be substantially better than H1, subject to demand momentum and commodity price stability.
Q: What is the status of the Exo liquid portfolio ramp-up? A: Chairperson Moothedath Jyothy stated that Exo liquid has only been in the market for three to four months and has performed reasonably as per expectations so far. She indicated that more detailed commentary on its performance would be available by the end of the year.
Q: Regarding the Pril exit, is there a cooling-off period before Henkel can re-enter the market, and could that dent numbers? A: CFO Pawan Kumar Agarwal stated that there is no specific clause requiring Henkel to wait a certain period, but the matter is before the court, so the company cannot comment further. He confirmed that Jyothy did not manufacture, distribute, or sell Pril products beyond May 31, 2026.
Q: What is the strategy and pricing for the newly launched Maxo incense sticks? A: Chairperson Moothedath Jyothy stated that Maxo incense sticks are priced at par with competition, and the company is the second organized player in this category. She highlighted that the product is a government-approved, safe solution with a trusted and stable molecule, and lab results show it is superior to competing products, acting within two minutes.
Q: Did the company evaluate the TTK Healthcare deal, and what is the overall M&A strategy? A: CFO Pawan Kumar Agarwal confirmed that the company looked at the TTK Healthcare business but did not take it forward because two of the four divisions were not aligned with the company's business strategy, and there was significant overlap in the remaining two. He reiterated that the company is aggressively looking at assets but applies stringent filters requiring alignment with the overall growth strategy.
Q: By when should we expect double-digit revenue growth, and what is the volume growth expectation? A: CFO Pawan Kumar Agarwal stated that the endeavor is to deliver double-digit revenue growth from the current quarter itself, with high single-digit volume growth expected through the year. He confirmed that for FY 2027, excluding Pril and Fa, the company expects double-digit growth.
Q: Has general trade de-grown year-on-year excluding the discontinued brands, and what is the competitive positioning in quick commerce? A: CFO Pawan Kumar Agarwal stated that general trade is on the positive side excluding Pril and Fa, despite pressure from subdued urban demand. He noted that e-commerce and quick commerce continue to be among the fastest-growing channels, growing in the range of 25% to 30%, with a focus on channel-specific assortment, premium packs, and better visibility.
Q: The gross margin dropped almost 10% year-on-year. Is this structural, and what gives confidence that margins will recover to historical levels? A: CFO Pawan Kumar Agarwal explained that the input price increase of 30% to 35% is unprecedented and impacted the company because 90% of the business is linked to crude oil prices. He stated that the company has been working for 1.5 years on diversifying and reducing dependence on crude-linked raw materials. Chairperson Moothedath Jyothy added that the company is on a journey to increase the share of high-margin personal care products, which should reduce the impact of crude volatility in the future.
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
