Why Did Jyothy Labs' Q4 Net Profit Drop by 2.4%?
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Synopsis
Jyothy Labs faces challenges as rising operational costs lead to a 2.4% decline in net profit for Q4 FY25. Despite a slight revenue increase, the company struggles with high material and employee costs. What does this mean for the future of Jyothy Labs and its investors?
Key Takeaways
- Net profit decline: 2.4% drop in Q4 FY25 compared to last year.
- Cost pressures: Significant increases in operational costs impacted profitability.
- Revenue growth: Marginal increase of just over 1% in Q4 FY25.
- Dividend proposal: Final dividend of Rs 3.50 per equity share for FY25.
- Exceptional loss: Reported loss due to equity stake sale in Bangladesh.
Mumbai, May 12 (NationPress) – The Indian FMCG powerhouse Jyothy Labs disclosed a 2.4 percent decline in its consolidated net profit for the quarter ending March 2025 (Q4 FY25) due to escalating input and operational costs outpacing revenue growth.
The company's net profit stood at Rs 76.25 crore, a decrease from Rs 78.15 crore during the same quarter of the previous fiscal year (Q4 FY24), as detailed in its stock exchange announcement.
Despite a slight revenue uptick of just over 1 percent, rising costs associated with raw materials, labor, finance, and depreciation exerted pressure on profitability. Revenue increased from Rs 659.99 crore in Q4 FY24 to Rs 666.96 crore in Q4 FY25.
Material costs soared to Rs 311.71 crore, compared to Rs 295.63 crore in the previous year.
Over the entire financial year FY25, total material costs amounted to Rs 1359.66 crore, a rise from Rs 1242.60 crore in FY24.
The employee benefits expense for Q4 surged to Rs 78.28 crore, up from Rs 72.56 crore in Q4 FY24, marking a 7.89 percent increase.
Finance costs experienced a steep climb of 31.75 percent to Rs 1.66 crore, compared to Rs 1.26 crore the previous year.
Additionally, depreciation and amortization expenses rose by 13.14 percent, reaching Rs 14.55 crore from Rs 12.86 crore.
On a positive note, advertisement and sales promotion expenses fell by 10.61 percent to Rs 53.41 crore, down from Rs 59.75 crore in the last financial year.
However, overall expenses in Q4 slightly increased by 0.97 percent, totaling Rs 571.23 crore, up from Rs 565.73 crore.
The company reported an exceptional loss of Rs 4.30 crore on a consolidated basis from the divestment of its entire equity stake in Jyothy Kallol Bangladesh Limited for Rs 2.10 crore.
The standalone loss was recorded at Rs 3.70 crore, according to the exchange filing.
In light of these developments, Jyothy Labs’ board has proposed a final dividend of Rs 3.50 per equity share for FY25, with the AGM date and record date for dividend eligibility to be announced later.
Point of View
We recognize the challenges Jyothy Labs is facing with rising operational costs. The decline in net profit highlights the pressing need for strategic adjustments to maintain financial health while navigating a competitive FMCG landscape. This situation is a reminder of the volatile nature of the market that companies must continually adapt to.
NationPress
08/06/2025
Frequently Asked Questions
What caused the decline in Jyothy Labs' net profit?
The decline was primarily due to rising input and operating costs that outpaced revenue growth.
How did Jyothy Labs perform in Q4 FY25 compared to Q4 FY24?
Jyothy Labs reported a net profit of Rs 76.25 crore in Q4 FY25, down from Rs 78.15 crore in Q4 FY24.
What were the significant expense increases for Jyothy Labs?
Significant increases were noted in material costs, employee benefits, finance costs, and depreciation expenses.
Did Jyothy Labs declare any dividends for FY25?
Yes, the board recommended a final dividend of Rs 3.50 per equity share for FY25.
What was the overall revenue growth for Jyothy Labs in Q4 FY25?
The company experienced a marginal revenue increase of just over 1 percent, from Rs 659.99 crore in Q4 FY24 to Rs 666.96 crore in Q4 FY25.
