M.P. Ramachandran, Chairman and MD, shares the company’s aggressive plans for future growth
What are your plans for 2014-15?
The top priority of Jyothy Labs in the current fiscal year is geographical expansion. We will widen our retail network, initiate advertising campaigns and rebranding of our products across India, and maybe expand our portfolio too. In fact, we are grooming a new team under the expertise of professional heads in key divisions such as Manufacturing, Sourcing, Distribution and Brand Management. We are expecting a 25% CAGR in the next three years. Under the new team, we plan to achieve revenues of Rs 3,000 crore by 2016.
What will be your advertisement spend this fiscal?
We have increased our advertisement spending by 10-12%. The company spent Rs.15.04 crore on advertising in the third quarter, up 25.2% from a year ago. Jyothy Labs’ expenditure on promotions in the third quarter tripled to Rs 12.04 crore from Rs 4 crore a year ago. Its combined advertising and promotional expenses in the third quarter rose by 71.6% to Rs 27.48 crore from Rs 16.01 crore a year ago. I believe advertisement is an investment. The more you advertise, the more revenue you will get.
How has the acquisition of Henkel India affected growth of Jyothy Labs?
Jyothi Labs has reported a 63.11% rise in its net profit to Rs 27.37 crore in the third quarter. The acquisition has accelerated our growth in a big way. The organisation will function like a well-oiled machine and derive optimal benefits of the synergies be it sourcing, manufacturing, distribution or marketing. Henkel’s strong presence in modern retail formats is an advantage.
How is the rural market growing for Jyothi products?
Around 70% of our revenue comes from rural India. Consumption has doubled in rural areas over the years. To take advantage of this rising market, we have stepped up marketing, sales and distribution. Exo for instance, is powerful brand in the bar section and is doing well in rural areas. The fact is that the rural market has been the key growth driver for Jyothy Labs in the past few years.