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Restructuring of the distribution channel led FMCG major Jyothy Laboratories (JLL) to report a 45 per cent drop in profits from Rs 25.59 crore to Rs 14.02 crore for the quarter ending June 30.
Net sales also dipped by 19.7 per cent from Rs 153.36 crore to Rs 123.13 crore.
JLL was earlier following a three-level distribution system and is now adopting a two-level distribution system starting Q3FY12. The move is to align with the distribution systems of Henkel India. The change in distribution system will have a positive impact on the earnings and reduction in working capital, according to the company.
As of date, JLL holds 72 per cent in Henkel India and is currently undertaking mandatory open offer for additional 20 per cent in shares of Henkel India.
Post-acquisition of Henkel India, JLL now has a repertoire of 10 brands — Ujala, Maxo, Exo, Henko, Mr. White, Chek, Pril, Margo, Fa and Neem.
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