Modern trade & CSD stores are still facing issues: Ullas Kamath, Jyothy Labs

Ullas Kamath, Joint Managing Director, Jyothy Labs Limited, talks about demand and newly opened dishwashing manufacturing unit during a candid chat with Swati Khandelwal, Zee Business. Edited Excerpts:

Q: Is there any particular segment where demand is sluggish and the category may not revive soon and its losses will be compensated by the health and hygiene segments? What are the products and segment from which you are cautious?

A: We are cautious about high-end washing powders, especially matic versions. And modern trade is not doing that well and CSD (canteen stores department) has its problems. So in urban India, modern trade unless it completely settles down the footfalls are still low in the modern trade. People prefer to go to the neighbourhood store. The footfall in modern trade is less than 50%, as of now. So, the big-ticket products, which are going through the modern trade and CSD category stores, are still challenging but CSD is showing a better, while modern trade is still challenging everybody. The products that will go high and discretionary products, which use to go in modern trade, we are seeing a challenge there. However, month-after-month improvement is there but going forward it might take a couple of quarter’s trill modern trade and CSD completely settles down. For us, it is about 10-12% of our business.

Q: The Company has recently opened a new dish wash manufacturing unit. How much CapEx will be invested in it and what is your outlook in terms of revenue from the unit? Also, tell us about the company’s capacity expansion and expenditure plans and how it will be managed?

A: This CapEx was used last year. The entire CapEx was invested before March for Pitampura unit. We have established a big unit for Exo dishwasher bar and it is a huge capacity that we have put up mainly to cater to Northern India. 50% of the capacity is being utilized at present but it is a huge plant. And, the current year we don’t have any CapEx and the next year also we don’t have any major CapEx and nearly Rs 20-30 crore of maintenance here and there.

But we don’t have any big CapEx this year and the next because we have sufficient capacity now across the country and we are happy about it. As far as the outlook for coming quarters are concerned than I am very positive and bullish because month-on-month, we are seeing an increase and month-on-month we are seeing the real sales and absolutely it is cash & carry sales. And our net debt has become zero as of now.

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To that extent the sales were happening in rural India because of the government support, MSP support and good agricultural yields and overall people are buying need-based products and we are happy about it.