FMCG sector outlook positive; strengthening brands to capitalise on opportunities, says Jyothy Labs

Terming the FMCG industry outlook as "very positive", Jyothy Labs said it is intensifying its distribution network and leveraging new-age digital channels to capitalise on opportunities.

The company, which owns brands such as - Margo, Ujala and Maxo, is intensifying its distribution network and increasing its spend on marketing and branding to strengthen its brands, the latest annual report of the company said.

The company is also leveraging new-age digital channels to connect with more audiences and drive engagement besides accelerating digital adoption across the organisation, it added.

"Our outlook is very positive. In a consumption-driven economy such as India, with its USD 5 trillion goals, the graph for the FMCG sector can only go north. The potential for Jyothy Labs' growth is effectively limitless, as we are present in categories where demand will always exist," said Jyothy Labs Joint Managing Director Ullas Kamath.

Besides, the company is also focussing on improving sustainability by reducing plastic consumption in its products, he said.

"This is also in line with the recent trend of consumers' growing preference for sustainable products and companies," Kamath added.

According to him, the balance sheet position provides headroom for making growth investments.

Jyothy Lab, which had registered an 11.6 per cent growth in its consolidated net revenue in FY 2020-21, has also become net debt-free with a cash balance of Rs 76.9 crore as of March 31, 2021.

"During the year, we improved demand planning with the addition of Continuous Replenishment System which was instrumental in reducing pipeline stock with distributors from 22-25 days in FY 2019-20 to 8-10 days in FY 2020-21," he added.

Jyothy Lab also mentioned that after the pandemic, the market scenario is changing towards a cash basis, unlike a credit basis, which was prevalent in the market.

"With the help of technology, distributors and retailers are holding less stock which further enhances their ROI (return on investment) which further aids the growth of FMCG Industry," it said.

The Indian Fast-Moving Consumer Goods (FMCG) industry is expected to undergo key shift changes because of the internet. Now consumers get the convenience to order in their own time after comparing the product features.

"E-commerce has changed the market paradigm completely. Boost in the FMCG sector has been witnessed due to internet penetration as traditional channels have also adopted digitisation in their day-to-day operations," it said.

Indian consumers are increasingly looking for the best deals as they have options to choose from newer brands.

"Thus, FMCG companies are constantly trying to influence consumers with their promotional deals and many firms are offering combo deals to attract consumers to buy their product," it said.