Jyothy Labs Pril Fa Brand License Non-Renewal

Henkel AG communicated non-renewal of Pril and Fa brand licenses following end of license term on May 31, 2026
Effective June 1, 2026, Jyothy Labs stopped manufacturing, marketing, selling, and distribution of Pril and Fa brands
Pril represented approximately 7-8% of company's total revenue (estimated INR 225-240 crores based on analyst questions)
Fa brand contribution to overall business remained limited with no material impact on operating fundamentals

Company has initiated arbitration at Singapore International Arbitration Center (SIAC) to protect contractual rights
Dispute centers on proper treatment of end-of-term consequences under license agreement framework
Agreement contains exit framework including defined contractual process for transition and valuation matters
Mechanism includes determination of consideration linked to business momentum and goodwill created during license period
Company explicitly states it is not disputing Henkel's ownership of the Pril and Fa brands

Pril and Fa operated under fixed-term brand license agreements with Henkel with royalties and defined exit provisions
Brands were part of Jyothy Labs portfolio for nearly 15 years since acquisition of Henkel's India consumer business in 2011
License had auto-renewal every 5 years and had been renewed twice over the last 10 years
Other Henkel brands (Margo, Neem Toothpaste, Tuhina, Chek) are fully owned by Jyothy Labs
Mr. White and Henko continue under perpetual license arrangements with no royalty obligations

Manufacturing facilities are multi-product and flexible, allowing capacity redeployment across liquids and other growth categories
Company does not expect material stranded manufacturing exposure from this transition
Operational matters including inventory, receivables, trade schemes, and channel settlements being managed as part of normal transition planning
No material residual exposure expected from such items
April and May 2026 manufacturing and sales occurred at normal course until June 1 stoppage

FY2027 expected to be a transition year for Dishwash Liquids segment
Near-term margin softness expected during transition phase
Company focusing on scaling Exo Dishwash Liquid as replacement anchor brand in liquids segment
Exo has been part of company's portfolio since 2005-2006 and is being scaled up with renewed focus and investment
Exo positioned as enzymatic liquid with antibacterial platform, priced at par with market leader
Several new product developments (NPDs) across categories in pipeline to help mitigate revenue gap

Pril had strong presence in modern trade and Tier 1/metro markets
Exo has pan-India distribution and strong presence in bar segment
Company confident in distribution muscle not being dependent on any single brand
Go-to-market strategy built on entire brand basket portfolio

Medium- and long-term business fundamentals remain intact
Supported by diversified portfolio across Fabric Care, Home Care and Personal Care
Established distribution network, manufacturing capabilities, and execution strength maintained
Company continues to look at inorganic growth opportunities but will not take rash decisions due to this event