Godrej Consumer meets street estimates as Q2 sales grow 9%, profit rises 5%

by 5paisa Research Team Last Updated: Dec 13, 2022 - 03:37 pm 46.7k Views
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Fast-moving consumer goods (FMCG) major Godrej Consumer Products Ltd came up with its financial numbers for the second quarter ended September 30 that were almost in line with what the analysts had expected.

Consolidated net profit rose 5% year-on-year to Rs 479 crore from Rs 458 crore in the second quarter last year. This was just marginally shy of around Rs 490 crore that analysts were expecting.

Consolidated sales, too, matched street expectations after rising 9% to Rs 3,144 crore.

The company’s share price declined 2.75% to Rs 950.25 apiece on the BSE in a weak Mumbai market. Most of the decline happened even before it declared its financials as part of bearish sentiment in the market on Thursday.

The company recently hired Sudhir Sitapati as Managing Director and Chief Executive Officer. Sitapati took over the reins in mid-October.

Godrej Consumer Q2: Other Highlights

1) Sales growth was led by India and Africa with 10% and 15% (16% in constant currency) rise, respectively.

2) Latin America sales declined 3% but rose 11% in constant currency; Indonesia business was largely flat.

3) India home care products grew 7% while personal care sales were up 12%.

4) India unbranded products sales and exports rose 21%.

5) Consolidated EBITDA margins was 21.6%, down 100 basis points from a year earlier.

6) EBITDA margins in India at 24.6%, a fall of 330 bps year-on-year.

7) India gross margins fell 830 bps because of a lag between increase in input cost and consumer price increases.

8) Margin decline mitigated partly through fall in employee benefit expenses (160 bps), advertisement and publicity (250 bps) and other expenses (100 bps).

9) EBITDA margins in international business at 17.2%, a decrease of about 40 bps year-on-year, driven by a decline in Latin America and SAARC margins.

Godrej Consumer management commentary

Nisaba Godrej, executive chairperson of GCPL, said the company delivered steady sales growth in the second quarter. “We continued our growth momentum and delivered another quarter of double-digit two-year CAGR of 10%. We saw steady sales growth in the home care and personal care categories,” she said.

Godrej also said that GCPL will continue to focus its efforts where the demand is in home care and personal care categories—in household insecticides, personal wash and hygiene, and hair care.

“We remain focused on expanding our total addressable market. We have a robust pipeline of consumer-centric innovations and are building out full portfolios across price points. To support this, we are strengthening our supply chain operations and ramping up new capabilities and channels in digital, e-commerce and chemists,” she added.

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