Tag: Godrej Consumer Products

Godrej Consumer Products expects gradual recovery in demand

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Godrej Consumer Products is likely to report double-digit growth in rupee terms led by mid-single digit volume growth on a consolidated basis. The company also said that growth trends are improving sequentially as well.

In its March quarter business update, GCPL said that it saw steady demand in India, which led to double-digit volume and value growth. It also said that volume growth has exceeded expectations.

The domestic branded business of Godrej Consumer has registered volume and value growth in the teens with both home care and personal care witnessing double-digit volume and value growth.

In the international business, one of the major markets of the company, Indonesia has started to see a gradual recovery in performance, with mid-single digit constant currency sales growth.

“The growth ex-Hygiene is close to double digits. We believe building blocks in Indonesia are in place to drive steady-to-strong performance in the next fiscal year.”

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Godrej Africa, USA, and Middle East (GAUM) witnessed a temporary pause in its strong double-digit sales growth momentum, clocking higher than mid-single digit sales growth in constant currency terms.

“This was due to elections and the impact of demonetisation in Nigeria. However, we have seen a strong sales recovery in March”, the company statement said.

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On a consolidated level, company expects the quality of its profits to see improvement, led by gross margin.

The stock is trading around the 52-week high level of Rs 973, which it hit on March 31. Shares of the company are up 7 percent so far this year. In contrast, shares of peer companies like HUL, Dabur, Marico are down 1-5 percent so far.

Shares of GCPL are off the day’s low, currently trading 0.2 percent lower at Rs 963.15.

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Godrej Consumer quarterly profit slumps 25% as input costs continue to hurt margin

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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[wealthdesk shortname=”Godrej Consumer” isinid=”INE102D01028″ bseid=”532424″ nseid=”GODREJCP” sector=”Personal Care” exchange=”nse”]

Godrej Consumer Products on Tuesday reported a net profit of Rs 358.9 crore for the July-September period — down 25 percent compared with the corresponding quarter a year ago. The FMCG giant’s profitability was marred by elevated levels of inflation, as high input costs continued to eat into its margin.

FMCG companies have been reeling under margin pressure due to high costs of raw material even as consumer prices have somewhat eased from their worst levels of the year.

The company’s quarterly revenue came in at Rs 3,364.5 crore, up seven percent on a year-on-year basis, according to a regulatory filing.

Revenue from the home care and personal care segments grew two percent and 18 percent respectively, according to a company statement.

Unbranded and export revenue, however, fell 26 percent compared with the year-ago period.

The company reported an EBITDA margin — a key measure of profitability — of 17.1 percent for the three-month period, down by 450 bps compared with the year-ago quarter.

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The company’s management said its pricing helped it deliver a steady performance for the three-month period.

“We continue to believe that with the relatively non-discretionary, mass pricing of our portfolio and good performance on market shares, volume growth
will return in the short term. Our overall EBITDA declined by 15 percent driven by consumption of high cost inventory, upfront marketing investments and a weak performance in our Indonesia and Latin America and SAARC businesses,” said Sudhir Sitapati, Managing Director and CEO at Godrej Consumer Products.

Its cost of raw material including packaging increased 18.4 percent to Rs 1,705.1 crore.

Godrej Consumer Products shares finished marginally lower amid choppy trade on Monday, ahead of the earnings announcement.

The stock has shed 0.7 percent of its value in the past one month, a period in which the Nifty50 benchmark has risen five percent.

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KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Godrej Consumer Products shares drop after company warns of decline in volumes, profit

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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[wealthdesk shortname=”Godrej Consumer” isinid=”INE102D01028″ bseid=”532424″ nseid=”GODREJCP” sector=”Personal Care” exchange=”nse”]

Godrej Consumer Products Ltd., one of the leading players in household, air care and aircare products in Emerging Markets expects its India business volumes to drop in mid-single-digits in the September quarter considering “soft trends” in the domestic FMCG industry.

The India business contributes nearly 60 percent to the company’s overall topline and over 80 percent of the company’s earnings before interest, taxes, depreciation, and amortisation (EBITDA). As a result, the company expects a mid-teens drop in its operating profit. It has cited consumption of high cost materials, significant upfront marketing investments to drive category development, and a weak performance in Indonesia, behind the warning.

Excluding the Africa region, Indonesia is GCPL’s second-largest individual market by country. The company expects the Indonesia business to report an early double-digit sales drop in constant currency terms due to waning of demand for hygiene products after Covid-19.

In-line with Marico’s commentary, GCPL also said that rural markets witnessed slower growth compared to urban. Marico on Tuesday had cited the weak sentiment in the rural markets, resulting in downtrading.

However, on the sales front, the company expects sales growth in the high-single-digits for the quarter, led by the personal care and home care business. It also expects constant currently sales growth in the high thirties for its Latin America business.

The company is also confident of a recovery in consumption and expansion in gross margins due to a significant correction in commodities like palm oil derivatives and crude oil. It expects sales to grow both in Indonesia (excluding hygiene), as well as its GAUM (Godrej Africa, Middle East, USA) business.

Despite the management’s weak commentary, Goldman Sachs sees Godrej Consumer as a strong turnaround candidate as growth in India’s homecare business improves. The firm is also witnessing initial signs of recovery in the Indonesia business. It expects lower input costs to aid margins and a sustained double-digit growth in the Africa business due to the company’s distribution initiatives.

Shares of Godrej Consumer are down 7 percent this year and have corrected over 20 percent from its 52-week high.

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Deficient rains didn’t hit rural demand hard, says Nadir Godrej

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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After some parts of the country received deficient rainfall, Nadir Godrej, chairman of Godrej Industries on Tuesday said deficient rains will not hurt rural demand hard.

He said, “We expect very good rabi crops because in the last few years the monsoon has extended quite late and that’s very good for the rabi crops but it’s very variable so the Kharif crops have seen for the last two or three years some degree of damage.”

Godrej said July inflation was lower than June inflation and commodity prices which shot up after the beginning of the Russian invasion of Ukraine have come down considerably.

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“Indian inflation is largely influenced by commodity prices. However, there is not much wage push inflation in the US and Britain. So when the commodity prices rose, wages were also rising in those countries. So by March-April, everyone is expecting inflation numbers in India to be quite reasonable. So we don’t have to worry much on that front,” he said.

Further, Godrej said, “In Godrej Industries, our major business is the chemicals business and it has been an excellent time for the Indian chemical industry, especially the specialty chemical industry.”

“In Godrej Consumer Products, there was a little bit of an effect of inflation but things are picking up now even for that business. Even for Godrej Properties, things are picking up. For the chemicals business, the last year was the best ever and this year is even better than last year,” he added.

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Godrej Consumer shares jump 5% as firm expects India sales to grow in double-digits

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Shares of Godrej Consumer Products jumped over 5 percent on Wednesday after the fast-moving consumer goods company (FMCG) said its India business would report double-digit growth in sales in the June quarter.

“In India, we expect to deliver early double-digit sales growth on a high base,” the company said in its quarterly business update.

At a consolidated level, Godrej Consumer Products expects to deliver high single-digit sales growth.

However, it sees operating margin shrinking on a yearly basis during the April-June quarter considering higher raw material costs, upfront marketing investments and weak performance in Indonesia.

“However, with inflationary pressures abating and significant correction in palm oil derivatives and crude oil, which are some of our key raw materials, we do expect a recovery in consumption and gross margins in the upcoming quarters,” the company said.

At 14:29 IST, shares of the consumer products company were trading 4.8 percent higher at Rs 872.15 on the BSE.

In Indonesia, with hygiene performance waning after COVID-19 and a large Hygiene comparator in base, Godrej Consumer Products expects a high single-digit decline in sales. The sales performance, excluding hygiene, was largely flat, it added.

Talking about Godrej Africa, the US, and the Middle East, the company continued its growth momentum across most of its key countries of operations. “We expect to deliver double-digit sales growth, with a continued focus on driving sustainable, profitable sales growth,” the FMCG player said in the update.

Furthermore, the company expects a constant currency sales growth in the high teens for its Latin America business.

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KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Godrej Consumer shares fall 5% as squeezed margin leaves investors unimpressed

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Godrej Consumer Products’ share price declined for the second straight day on Friday, a day after the company reported a weak performance for the January to March 2022 period, missing Street estimates as inflationary pressure led the firm’s margin to slip even more than expected.

Godrej Consumer stock fell more than 5 percent in intraday trade and ended 4.4 percent lower at Rs 760 on the BSE.

Except for a 6 percent year-on-year (YoY) rise in revenue for the quarter ended March 2022, the fast-moving consumer goods (FMCG) company failed to meet Street expectations on all fronts — profit, margin, and EBITDA.

Godrej Consumer Products’ net sales rose to Rs 2,915.82 crore, up 6.78 percent from March 2021. Total expenses were higher at Rs 2,535.06 crore than Rs 2,259.12 crore in the same period a year ago.

While the company was expected to deliver a flat margin, the parameter fell from 20 percent in the March quarter last year to 16 percent this time, as inflation concerns hit the sector leading to price hikes.

Godrej Consumer said the April to June quarter of 2022 will be difficult due to margin pressure but will likely improve over the next few quarters.

“The last quarter of FY22 had a few exceptional hits in terms of margins, which may not continue in the first quarter of FY23. On the other hand, commodity prices in the first quarter are significantly higher than they were, at least in terms of consumption. So, I don’t know exactly where we landed up in the first quarter, but I can tell you that it won’t be an easy quarter, certainly in terms of margins,” the firm’s MD & CEO Sudhir Sitapati told CNBC-TV18.

However, overall, the firm is bullish about the Indian market for FY23 as it is witnessing green shoots in demand. “I don’t think the next quarter or this quarter will be terrific, but when I look at fundamentals and the way things are shaping up, I am reasonably bullish about FY23,” Sitapati added.

The company, however, is concerned about the Indonesian market and sees better growth in the second half of the financial year.

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KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Godrej Consumer eyes double-digit sales growth with price hikes but Street is cautious

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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[wealthdesk shortname=”Godrej Consumer” isinid=”INE102D01028″ bseid=”532424″ nseid=”GODREJCP” sector=”Personal Care” exchange=”nse”]

Shares of Godrej Consumer Products declined in Thursday’s session as Street is expecting the fast-moving consumer goods (FMCG) company’s margin to be flat in the fourth quarter of the 2021 fiscal though revenue is likely to increase on the back of price hikes.

After rising for four straight sessions, Godrej Consumer consumer shares slipped more than 5 percent during the day hitting an intraday low of Rs 786.20.

At 1:15 pm, the stock was trading at Rs 790.30, down 4.7 percent from its previous close.

A CNBC-TV18 poll of analysts has predicted its revenue to increase by 6 percent to Rs 2,895 crore in the March quarter, Godrej Consumer Products said it hopes to register double-digit sales growth in India following price hikes it implemented in November 2021.

The company’s chief financial officer Sameer Shah had in November said, the firm would take a 10-11 percent price increase for the rest of the year.

While it expects double digital sales growth in India and Latin America, the firm sees a sales decline in the high teens in Indonesia, according to a company update.

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“In India, we expect to deliver close to double-digit sales growth, driven entirely by pricing. Our 2-year CAGR would be in early twenties. We witnessed a mixed performance in our Personal Care and Home Care categories. Personal Care sustained its double-digit growth trajectory, primarily led by pricing in Personal Wash. Home Care witnessed a soft performance on a high base, impacted by a relatively muted season for Home Insecticides and the discretionary nature of Air Fresheners,” the firm said in an update.

The Street, meanwhile, has projected the FMCG company’s profit to rise by nearly 5 percent to Rs 384 crore while the margin is likely to remain flat at 19 percent as against 20.1 percent in the same quarter last year.

Godrej consumer in its update said, “Some of our short term challenges such as unprecedented global commodity inflation and the performance of our Indonesia business, continued to play out during the quarter, impacting consumption and margins.”

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It added that the FMCG industry witnessed a consumption slowdown over the last few months. The sector continued to be hit hard by higher inflation levels, leading to successive price increases, and impacting volumes, according to the company update.

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KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow