Our internal growth target is 10%-12%: Ullas Kamath, Jyothy Laboratories

In a chat with ET Now, Ullas Kamath, Jt MD & CFO, Jyothy Laboratories, says EBITDA margin should be about 16%. Based on current monsoon situation and also the Seventh Pay Commission hopeful of being able to do little better than that. Edited excerpts.

ET Now: To start off, let us talk a little bit about the breakout between the volume growth and the price growth that has contributed to your topline this time around.

Ullas Kamath: This is one of the good quarter and the volume growth was 10.2% while the value growth was 8.9%. We have grown across all the segments barring mosquito repellent business. This is because of the extended summer and that was minus 11%. But otherwise, fabricare, dishwash segment and personal care have grown in double digit and overall, the growth has been 10.2% and EBITDA numbers for the current quarter is at 18.4% again going 150 bps more than the last quarter same period. Overall, it is a very healthy quarter for us barring household insecticides.

ET Now: Now you have not only been able to post good growth in your key segment areas which is dishwashing as well as fabricare. What really led to this and do you think that this kind of growth is sustainable?

Ullas Kamath: One is the new advertising creatives what we have aired in the last six months. All of them are based on the consumer insights and we are able to get the market share because of the that and fantastic distribution across the country and the new product launches which we have done as a brand extension and led to the growth. What is heartening to note is Ujala, our mother brand has grown by 10%. This is the first time in three-four years we are seeing that kind of volume growth and that makes us believe that rural has started picking up. It will be better than what it used to be in the past and now that rainfall is more than normal, we are extremely happy so that like in the coming quarters we will be able to do much, much better than the industry.

ET Now: Let us talk about your margins this time around. They have also expanded pretty significantly. So how much of this would you attribute to the fall in input cost and will you be able to maintain these margin levels at 18%?

Ullas Kamath: Absolutely, it is the lower input cost and a lot of efficiency which have brought in our production, in the supply chain and for the year, our EBITDA margin what we had given the guidance was about 15%, but right now we are at 18.2% but this is the best quarter for us, quarter one has always been the best quarter for us in EBITDA margins. So going forward because of the fluctuation in the product mix, our margin will come down to about 16% for the year as a whole.

ET Now: And now given the fact that there are so many triggers for consumption growth, you got the Seventh Pay, GST, good monsoon, take us through what kind of targets you are pencilling in now for volume growth.

Ullas Kamath: Our internal growth target is 10% to 12% volume and EBITDA margin should be about 16%. Based on the current monsoon situation and also the Seventh Pay Commission, we are hopeful that we will be able to do little better than that and GST will be icing on the cake.

ET Now: And have you heard anything from Henkel as to whether they will be buying out the 26% stake buy option in Jyothy Laboratories?

Ullas Kamath: They do have an option to invest up to 26% till March 2017 and talks are on and at this point in time we will not be able to give more information and as and when it happens, we will communicate.