Jyothy Labs Limited has issued a press release and clarification note following Henkel AG & Co. KGaA's decision not to renew the licence agreements for the Pril and Fa brands beyond May 31, 2026. The disclosure was made pursuant to Regulation 30 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, following a Board of Directors meeting held on May 9, 2026. The development marks the close of a 15-year association during which Jyothy Labs built and scaled the Pril and Fa brands in India. The Company is now preparing for an orderly transition and the next phase of growth led by owned brands.

Background of the Licence Arrangements

In 2011, Jyothy Labs acquired Henkel's India consumer business through a composite transaction covering brands, assets, operations, and distribution capabilities. As part of this arrangement, the brand portfolio was structured across three categories of ownership and licensing. The key details of the licence agreements are summarised below:

The broader brand portfolio under the 2011 transaction was structured as follows:

Regulatory Disclosure

In compliance with applicable SEBI regulations, Jyothy Labs filed the following disclosure with the stock exchanges on May 9, 2026. The Annexure A, enclosed with the filing, contains the structured disclosure as required under Regulation 30:

The disclosure was signed and filed by Shreyas Trivedi, Head – Legal & Company Secretary of Jyothy Labs Limited, on May 9, 2026.

Board Review and Non-Renewal Conclusion

Over the past several months, Jyothy Labs and Henkel were engaged in ongoing discussions and negotiations regarding the possible continuation and renewal of the brand licence arrangements beyond May 31, 2026. Various commercial and business continuity alternatives were also explored between the parties during this period. On May 9, 2026, the Board of Directors reviewed the status of these discussions, together with the communication received from Henkel. Based on the overall status of the discussions and the absence of a mutually acceptable framework for continuation, the Board concluded that there was no further reasonable certainty regarding renewal of the Pril and Fa brand licence agreements beyond May 31, 2026. The Company will now follow the exit and transition mechanism prescribed under the relevant agreements, including the process relating to Business Transfer and determination of consideration as contemplated under the contractual framework. The Company will continue to engage with Henkel constructively and in accordance with the agreed contractual process.

Transition Strategy and Portfolio Readiness

Jyothy Labs has already initiated transition planning measures and outlined its strategy for the next phase of growth led by owned brands. The company's approach to business continuity is centred on the following:

• Within the dishwash segment, Pril has historically been the anchor brand in liquids, while Exo has anchored the bars segment. The current development provides an opportunity to strengthen Exo as a holistic dishwash franchise spanning formats. Exo dishwash liquid has been part of the Company's portfolio since 2005-06 and is now being scaled up with renewed focus and investment.
• The Fa brand's contribution to the Company's overall business has been limited, and its exit does not materially alter the Company's operating fundamentals.
• Manufacturing facilities are multi-product and flexible, allowing capacity redeployment across liquids and other growth categories. The Company does not expect any material stranded manufacturing exposure arising solely from this transition.
• The Company's broader portfolio across fabric care, home care, and personal care, supported by strong distribution and a steady innovation pipeline, remains unchanged.

The Company also clarified that the brand licence agreements contain a contractual mechanism for determination of consideration linked to the business momentum and goodwill created during the licence period, and this process will be pursued in accordance with the contractual framework. The transition framework under the agreements is structured and defined, including a goodwill mechanism, and Jyothy Labs will take all appropriate steps within the contractual framework to protect the interests of the Company and its stakeholders.

Financial Implications

The Company recognises that Pril has been an important contributor within the dishwash liquids segment. Accordingly, there could be certain near-term impacts on revenue mix and margins during the transition phase. The Company has already initiated transition measures including scale-up and strengthening of Exo dishwash liquid, dishwash category actions, manufacturing realignment, and other business continuity initiatives. The Company presently believes that the medium and long-term fundamentals of its business remain intact, supported by its diversified portfolio, established distribution network, manufacturing capabilities, and execution strength. Jyothy Labs remains committed to transparent communication, disciplined execution, and long-term value creation, and further updates will be made as and when required in accordance with applicable law and regulatory requirements.

Management Commentary

M R Jyothy, CMD of Jyothy Labs Limited, commented on the development:

"Pril and Fa were an important part of our journey for nearly 15 years. Henkel's decision brings that chapter to a close. We are confident in our ability to manage this transition responsibly and build the next phase of growth. Our focus remains on continuity, scaling our brands, and long-term value creation for our stakeholders."

Jyothy Labs Limited announced its audited financial results for the quarter and year ended March 31, 2026, reporting strong volume growth despite navigating cost pressures. The results were published in Business Standard (English) and Navshakti (Marathi) on May 5, 2026, in compliance with Regulation 33 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. For Q4 FY26, the Company recorded revenue of ₹717 crore, registering 7.7% value growth and 10.8% volume growth year-on-year. Operating EBITDA margin stood at 13.5%, contracting from 16.8% in the year-ago period due to lower sales realization and inflation in input prices. The financial results were reviewed by the Audit Committee and approved by the Board of Directors on May 4, 2026, following an unmodified opinion from statutory auditors M/s. B S R & Co. LLP.

Financial Performance Overview

FY26 revenue reached ₹2,944 crore with 3.5% value growth and 6% volume growth. Operating EBITDA for the full year stood at ₹449.90 crore with a margin of 15.3%. Profit after tax for FY26 was ₹333.20 crore. The Company remains debt-free with a strong cash position of ₹1,000 crore, and net working capital improved to 15 days during the year. The Board has recommended a final dividend of ₹3.50 per equity share of ₹1 each for the financial year 2025-26, subject to shareholder approval.

The table below presents key financial metrics for the quarter and full year:

Input Cost Pressures and Pricing Actions

Management highlighted that approximately 50% to 60% of inputs are directly or indirectly linked to crude oil prices, making the business significantly exposed to commodity volatility. Packaging costs alone account for nearly 15% to 20% of material costs. Key raw material LABSA saw prices rise by 60% to 65% between January and April, while crude-linked packaging materials HDPE and PP rose by approximately 50% to 55% in March and April. In response, the Company took selective price increases of approximately 4% across its portfolio in March, the full impact of which is expected to be visible in Q1 and Q2 FY27. Management clarified that the 4% figure represents the net effect of pricing decisions, including adjustments to schemes and average selling prices. CFO Pawan Agarwal noted that passing on the full impact of cost increases immediately is difficult, particularly in lower unit packs where price points are fixed, and that further pricing actions will be taken depending on how input costs evolve.

FY27 Outlook and Margin Guidance

Management indicated that FY27 margins are likely to remain under pressure in the near-term, with Q1 FY27 expected to see some margin compression. The Company stated it is unable to provide clear margin expectations for FY27 at this stage, citing unstable input costs, currency movements, and uncertain geopolitical conditions stemming from the West Asia situation. Clarity on the margin trajectory is expected only once the external environment stabilizes, which management hopes could occur within a couple of quarters. The Company stated it will manage margin pressure through a combination of pricing actions, cost control, operating leverage, and calibrated media spends. On the tax front, the Company estimates its FY27 effective tax rate to be in the range of 25% to 26%, as it operates under the 115BAA tax regime. Capital expenditure for FY27 is expected to remain in a similar range to the previous year.

Segment Performance

The table below summarises segment-wise performance for Q4 FY26 and the full year:

Fabric Care delivered the strongest performance, with liquid detergents nearly doubling during the year. Key brands Henko, Ujala, Mr. White, and Morelight performed well, supported by the successful launch of Dr. Wool. Management noted that market shares in liquid detergents have improved, and that the category shift from powder to liquid is expected to continue. The Dishwash segment faced intense competitive pressure, with players reducing MRPs and offering higher grammage at the same price. Competitive intensity in Dishwash remained unchanged as of the call. On its Silver Jubilee, Exo launched two new variants under Exo Bar and a bio-enzyme-based Exo Liquid, positioned to compete directly with the market leader and differentiated from the premium Pril brand. The Personal Care segment returned to growth, with the Margo franchise growing 5% in value, supported by a refreshed pack for Margo Original and improved demand following GST rate changes. Price increases were also initiated in Margo in March. In Household Insecticides, Liquid Vaporizers now constitute approximately 55% of the HI portfolio, up from 50% the prior year. Losses in the HI segment were reduced significantly from ₹25 crore in the prior year to approximately ₹5 crore, with management indicating the profitability target for the segment could be achieved ahead of the previously stated FY27 timeline.

Corporate Developments and M&A

Key dates related to the dividend and Annual General Meeting are as follows:

On the subject of capital allocation, management confirmed that the Company is actively scouting for acquisition targets and is in dialogue with a couple of potential candidates. The Company applies a robust screening process covering cultural alignment, channel fit, category, price point, consumer segment, and presence on organised trade. Management reiterated that any acquisition decision will be communicated to the market at the appropriate time, with a focus on assets that add to overall shareholder value. The Company continues to add approximately 50,000 to 100,000 retail outlets annually across general trade. Modern trade, e-commerce, and quick commerce channels continue to grow strongly and are becoming an increasingly important part of the portfolio. Further details are available on the Company's website at www.jyothylabs.com and on the stock exchange websites.