Earnings Review
Godrej Consumer Oct-Dec PAT down 14% on year, below view
This story was originally published at 20:42 IST on 24 January 2025
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--Godrej Consumer Oct-Dec consol net profit INR 4.98 bln
--Analysts saw Godrej Consumer Oct-Dec consol net profit INR 5.30 bln
--Godrej Consumer Oct-Dec consol PAT INR 4.98 bln vs INR 5.81 bln year ago
--Godrej Consumer Oct-Dec consol sales INR 37.68 bln vs INR 36.60 bln yr ago
--Godrej Consumer to pay INR 5 per share interim dividend
--Godrej Consumer Apr-Dec consol PAT INR 14.40 bln vs INR 13.33 bln year ago
--Godrej Consumer Apr-Dec consol revenue INR 107.66 bln vs INR 107.11 bln
--Godrej Consumer Oct-Dec one-time cost of INR 57.4 mln
--Godrej Consumer Oct-Dec advt, publicity cost INR 3.64 bln vs INR 3.43 bln
--Godrej Consumer Oct-Dec consol India revenue INR 22.62 bln vs INR 22.04 bln
--Godrej Consumer Oct-Dec consol Indonesia sales INR 5.08 bln vs INR 4.67 bln
--Godrej Consumer Oct-Dec consol Africa revenue INR 7.72 bln vs INR 9.23 bln
--Godrej Consumer Oct-Dec consol underlying volume growth flat on year
--Godrej Consumer Oct-Dec Indonesia sales up 8% on year in constant currency
--Godrej Consumer consol operating EBITDA margin 20.2%, down 300 bps on year
--Godrej Consumer Oct-Dec India operating EBITDA margin 22.6%
--Godrej Consumer Oct-Dec India operating EBITDA margin down 710 bps on year
--Godrej Consumer Oct-Dec India home care sales INR 10.95 bln, up 4% on yr
--Godrej Consumer Oct-Dec India personal care sales INR 10.44 bln, up 2% YoY
--Godrej Consumer India insecticides ops impacted by poor season Oct-Dec
--Godrej Consumer home care premium pdt hit by urban demand slowdown Oct-Dec
--Godrej Consumer: Have started to gain share in home care premium formats
--Godrej Consumer: Palm oil inflation hit India personal wash ops Oct-Dec
--Godrej Consumer: Took significant price hikes across personal wash pdts
--Godrej Consumer:Personal wash pdts margin to be under pressure for few mos
By Arya S. Biju
MUMBAI – Godrej Consumer Products Ltd. Friday reported lower-than-expected consolidated net profit for the December quarter, marking an on-year fall after rising for the previous two quarters. The company's top line was, however, broadly in line with the Street's expectations.
The fast-moving consumer goods company's consolidated net profit for the December quarter declined 14.2% on year to INR 4.98 billion, lower than the Street's expectation of INR 5.30 billion. The company incurred a one-time cost of INR 57.40 million for the quarter.
The company's consolidated revenue for the quarter rose 3.0% on year to INR 37.68 billion. Analysts had expected the company's consolidated revenue to be INR 37.46 billion for the quarter. The subdued performance in the quarter was due to a slowdown in urban demand, the company said in the investor presentation. Further, the company had to increase the prices of some products due to a surge in cost of palm oil recently, which also hit its volume growth during the quarter.
For the nine months ended December, the company reported a consolidated net profit of INR 14.40 billion, up from INR 13.33 billion a year ago. The company's consolidated revenue for the same period was INR 107.66 billion, up from INR 107.11 billion a year ago.
The total expenditure of the company for the quarter rose 7.6% on-year to INR 31.64 billion. Within other expenses, advertising and publicity costs rose 6% on year to INR 3.64 billion and 'others' increased 7.6% to INR 31.64 billion. Raw material costs for the quarter rose 2.3% on year to INR 14.69 billion.
Revenue from Indian operations for the quarter was INR 22.62 billion, up 2.6% on year. This was due to an increase in palm oil prices by more than 40% and weak seasonality in household insecticides, Sudhir Sitapati, chief executive officer and managing director of the company said in its press release.
The home care product category of the company saw a 4% on-year growth in revenue to INR 10.95 billion. Within the home care products segment, air fresheners and laundry liquids reported strong double-digit volume growth. In household insecticides, Goodknight Agarbatti gained significant market share in the incense sticks category, the company said. The company has started gaining market share in the premium formats for household insecticides. However, the premium format was impacted by urban slowdown and category seasonality.
The personal care segment reported sales of INR 10.44 billion, up 2% on year. Personal wash products volumes declined by mid-high single digits in the December quarter, impacted by cost pressure due to inflation in palm derivatives. The company has undertaken price hikes across the portfolio to compensate for this. Hair colour volumes grew in the mid-single digits.
Revenue from the operations in Indonesia rose 9% on year to INR 5.08 billion. In constant currency terms, sales grew 8% on year. Volumes in the segment grew 6% on year, with hair colour reporting double-digit volume growth and household insecticides reporting volume growth in the teens. Stella Pocket continued its robust performance with volumes doubling on-year.
The company's business in Africa, the US, and West Asia declined 8% on year to INR 7.72 billion. In constant currency terms, however, sales grew 1% on year.
The consolidated underlying volume growth remained flat on year. The company reported consolidated operating earnings before interest, tax, depreciation, and amortisation margin of 20.2% for the December quarter, down 300 basis points on year.
The operating EBITDA margin for India operations contracted on year by 710 bps to 22.6%, lower than the company's normative range. The operating EBITDA margin for Indonesia operations for the quarter rose 60 bps on year to 21.5%, led by gross margin expansion, the company said. Margin expansion in Africa, the US, and West Asia was led by gross margin expansion, mix improvement and reduction in controllable costs. The operating EBITDA margin for the region rose by 340 bps to 14.8%.
The company also announced an interim dividend of INR 5 per share and set the record date as Feb. 3. The dividend will be paid on or before Feb. 23. On Friday, shares of Godrej Consumer Products closed at INR 1,130.35 on the National Stock Exchange, down 1.3% from the previous close. The company announced its Oct-Dec earnings after market hours.
End
Edited by Saji George Titus
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