Viswanath Pilla
Moneycontrol News
JHS Svendgaard Laboratories, which is into contract manufacturing and distribution of oral care products like tooth pastes, tooth brushes and mouth washes, is in the process of buying a plant in south India to diversify into other beauty and personal care products like creams and shampoos.
"We are evaluating two contract manufacturing sites to produce hair oils, gels, shampoos, creams and lotions in south India," said Nikhil Nanda, Managing Director of Delhi-based JHS Svendgaard.
Nanda said the manufacturing site under evaluation will give them a pan-India footprint and expand its product portfolio. JHS Svendgaard has two facilities in Noida, Uttar Pradesh and Kala Amb in Himachal Pradesh.
"Once we acquire the South facility, we are going to shift some of the tooth paste and tooth brush capacity there, and some of the lotion cream capacity here. We will be able to service both the sets of clients," Nanda said.
Nanda said the acquisition would cost around Rs 40-50 crore and the company may have to raise funds. "We do have initial funds with us. We are trying to do more of a (share) swap deal. If it requires more cash, probably we will raise it," he added.
The company expects to close the deal by the end of current fiscal.
The stock, which was one of the best performing smallcaps in FY18, doubling investor returns, however lost much of its steam in FY19.
JHS Svendgaard had sales of Rs 140.73 crore in FY18 and a net profit of Rs 28 crore.
The company is recovering from a sales hit it took in H1 FY19, due to supply chain issues faced by one of its top client Baba Ramdev's Patanjali that contributes 30 percent of total revenue.
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