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Informist, Wednesday, Aug 7, 2024

--Godrej Consumer: Apr-Jun Indonesia ops volumes grew 7% on year

--Godrej Consumer: Apr-Jun India ops volumes grew 10% on year

--Godrej Consumer: Apr-Jun consol EBITDA grew 13% on year

--Godrej Consumer to pay 5 rupees/share interim dividend

--Godrej Consumer Apr-Jun consol revenue 33.32 bln rupees vs 34.49 bln

--Godrej Consumer Apr-Jun consol PAT 4.51 bln rupees vs 3.19 bln

--Analysts saw Godrej Consumer Apr-Jun consol PAT 4.78 bln rupees

--Godrej Consumer Apr-Jun consol net profit 4.51 bln rupees

By Avishek Rakshit

KOLKATA – Cost control measures and higher income from Indian and Indonesian operations helped Godrej Consumer Products Ltd to post a healthy year-on-year growth in consolidated net profit in Apr-Jun even as its revenue declined and part of the global operations continued to reel under pressure.

The company reported a net profit of 4.5 bln rupees, registering a 41.4% year-on-year growth. The net profit, however, missed the Street’s estimate of 4.8 bln rupees. The revenue in Apr-Jun declined 3.4% year-on-year to 33.3 bln rupees. The revenue was also below the Street’s estimate of 35.0 bln rupees.

A decline of 21.2% in raw material costs and 11.0% in employee costs helped the company to offset a 3.2% increase in advertising costs and post an increase in profits. These three costs are the primary overheads for the company. Total expenses in Apr-Jun declined 7.2% on year to 27.4 bln rupees.

The company's earnings before interest, tax, depreciation, and amortisation grew 13% and EBITDA margin, encompassing all operations, improved by 310 basis points from a year ago to 21.9%.

Domestic sales volumes of Godrej Consumer Products, which account for 65% of the total revenues, rose 10% in Apr-Jun. The company's brands, excluding acquired brands like Park Avenue and Kamasutra, registered 8% volume growth during the quarter. Revenues from India increased 7.9% on year at 21.6 bln rupees, but the EBITDA margin fell by 20 basis points to 24.7%.

The home care segment, which comprises products like household insecticides, air fresheners, and fabric liquid detergents, registered a volume growth of 8%. Sales volume in household insecticides was stable in the low-single-digit, impacted by severe heatwaves, while air fresheners continued to report double-digit volume growth and gained market share. The fabric care segment also delivered strong double-digit volume growth during the quarter.

Sales volume in the personal care segment rose 6%. Personal wash products delivered stable volume growth at low single digits and the hair colours segment, which was impacted due to fewer weddings, registered flat sales volume.

The acquired brands - Park Avenue and KamaSutra – posted 1.5 bln rupees of sales after portfolio simplification and rationalisation of sales packs.

“We remain focused on driving volume-led growth along with healthy investments in our brands and improvement in profitability,” Managing Director and Chief Executive Officer Sudhir Sitapati said in a statement. “We are on track in our journey to reduce wasted cost and are deploying this to drive profitable and sustainable volume growth across our portfolio through category development.”

Its sales in Indonesia, the largest market outside India, grew by 11% in constant currency terms, but translated to a 3% growth when converted into Indian currency. The lower growth in the Indian currency is on account of the depreciation of the Indonesian rupiah. Sales volume in Indonesia grew by 7% and EBITDA margin improved by 400 basis points to 23.3%.

However, total sales in Africa, the US, and West Asia fell by 23% in constant currency terms and declined by 36% in Indian currency. The decline was on account of the devaluation of the Nigerian naira. The volume decline was led by one-time sell-in in base and streamlining of trade inventory, leading to a leaner and more profitable supply chain, the company said. The EBITDA margin from these regions increased 660 basis points to 14.4%, and EBITDA increased to 780 mln rupees from 660 mln rupees a year ago.

The company said it will pay an interim dividend of 5 rupees per share.

Shares of Godrej Consumer Products ended 1.7% higher at 1,503.8 rupees on the National Stock Exchange. End

IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT

Edited by Saji George Titus

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