Compression in margins on account of higher input costs and fall in realisations impacted Jyothy Laboratories’ results for the December quarter (Q3). The cash crunch arising from the note ban added to its woes.
However, consolidated net profit grew 6.4 per cent over a year to Rs 22 crore (the Bloomberg consensus estimate was Rs 29 crore), as the tax rate fell from 38.6 per cent to 34.3 per cent.
These tax savings were driven by shifting of production to its Guwahati plant (which enjoys tax exemptions) and reversal of taxes paid earlier. Apart from triggering downgrades of full-year earnings estimates, this miss could also keep the stock price under check.