Jyothy Labs steps up investment in Exo amid Henkel exit

Jyothy Labs Ltd will increase investment in its domestic dishwasher brand Exo to offset the fallout from German partner Henkel AG’s decision to pull out of a 15-year licensing deal for the Pril and Fa brands.

CFO Pawan Kumar Agarwal told shareholders at the company’s 35th annual general meeting on Tuesday that “while the exit of Pril may have a short-term impact on the performance of the dishwasher portfolio, your company is accelerating investments in the Exo dishwasher to strengthen its position in the category.”

Shares of the consumer goods maker have fallen 27.9% this year, more than three times the decline in the benchmark Nifty 50, after Henkel told bourses on May 9 that it would not renew the deal. The stock hit a 52-week low ₹188.10 on July 8.

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Jyothy Labs reported a 10% drop in annual profit to ₹333 crore in the year to March, even as sales rose 3.5%. ₹2,944 crore as input costs associated with oil shot up after the Iran-US conflict.

Other prominent brands of Jyothy Labs include Ujala Fabric Bleacher, Exo Washing Stick/Liquid, Maxo Mosquito Repellent, Henko Detergent and Margo Soap.

The company focuses on its own brand of dishwashers, Exo. “Our focus is on consumer-centric innovation, improving product quality, cost efficiency and developing differentiated offerings across our brands. Investments in research and development rose to an almost five-year high in the year ₹25 crore,” Agarwal said.

The company is currently debt free and has a cash balance of ₹997 crore in FY26, up 31.7% year-on-year and nearly 12 times its balance in FY22. “We continue to see good opportunity to grow the business organically,” Agarwal said.

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Growth in FY26 was driven by fabric care, which saw 8.1% growth in value and 9.5% in volume, with double-digit growth in liquid detergents. Despite a 6% increase in volume, the dishwashing segment saw a marginal 1.3% decline in value in FY26. Personal care saw a rebound in FY26, with Margo franchise value up 5.2% and volumes up 1.6%.

Exo bet

“The company is now positioning Exo in the broader dishwasher franchise,” MR Jyothy, chairman and managing director, told shareholders. “Exo will now be developed as an own-brand platform across formats supported by a portfolio of established brands, a robust distribution network and strong execution capabilities,” she added.

Pril has historically been the main brand for dishwashing liquids and Exo for bars. Now the company is expanding Exo’s presence in the dishwasher segment with new products and faces. Jyothy Labs has appointed film actors Yami Gautam and Keerthy Suresh as Exo brand ambassadors. However, in FY26, the company’s advertising and sales promotion costs fell to ₹227 million from ₹240 crore in the previous year. “The newly launched variants of Exo in dishwasher and liquid formats, Dr. Wool liquid detergent and refreshed Margo packaging resonate well with consumer demand for niche and quality products across categories,” said MD Jyothy.

Analysts are generally bullish on the stock with 11 buys, 3 holds and only 2 sell calls as of Tuesday.

“According to our checks, Pril accounted for approximately 25-30% of washing dishes revenue, representing 8-10% of Jyothy Labs’ total revenue,” analysts at JM Financial said on May 9.

Dear War

Management attributed the profit decline to rising commodity prices due to the Iran-US war that began in late February, as nearly 60% of the company’s key raw materials and packaging inputs are oil-related.

“During the year, geopolitical developments, particularly the conflict in West Asia, led to significant inflation in crude oil and raw materials and packaging materials related to crude derivatives,” said CFO Agarwal.

“Your company has selectively raised prices in the range of 3-4% several times in March, but it has been difficult to pass on the full impact of the increase in input costs,” he said. The largest in April FMCG player Hindustan Unilever Ltd, which competes in Dishwashing (Vim) and Fabric Care (Surf, Rin, Comfort) categories, has introduced calibrated price hikes of 2-5% across various product portfolios and reduced grammage in bag sizes.

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The company’s insecticide business, which includes the Maxo mosquito repellent brand, remains a sore point. The segment posted EBIT losses of approx ₹5 crore in FY26, down from ₹25 crore in FY25 as the business remains sensitive to changes in weather and the intensity of monsoons. In comparison, Godrej Consumer Products’ liquid Good Knight portfolio has seen a market share increase of 300 bps over the last 3 years.

“We believe Jyothy Labs is successfully defending its position in a fragmented market, but its inability to accept aggressive price hikes without sacrificing volume hurts its profile in the near term,” analysts at ICICI Securities said in a May 5 note.

Key things

Jyothy Labs accelerates Exo investment after Henkel exits Pril license deal.
The stock has fallen 27.9% since January, far underperforming the broader Nifty 50 index.
FY26 profit was down 10%. ₹333 crore, even though overall sales grew by 3.5%.
Commodity inflation related to the Iran-US conflict squeezed margins during the year.
Analysts remain mostly bullish, although pricing power and Max weakness remain key concerns.