More Stories

Informist, Saturday, May. 3, 2025

By Avishek Rakshit

KOLKATA – Like all consumer goods companies, Godrej Consumer Products Ltd. continues to face muted demand, especially in urban markets. But its focus on reviving underlying volume growth and stabilising its international business could yield financial dividends for the company in the March quarter. 

The consumer goods company is expected to report a consolidated net profit of INR 4.9 billion for the March quarter as against a net loss of INR 18.9 billion in the year-ago quarter, and revenue is expected to increase 6.5% on year to over INR 36 billion, according to the average of estimates from 14 brokerages. 

The profit is not comparable on a year-on-year basis as Godrej Consumer Products had reported a consolidated net loss of INR 18.9 billion in the year-ago quarter on revenues of INR 33.9 billion. This loss was due to an INR 23.8 billion charge from restructuring its business in East Africa. 

Sequentially, the net profit could dip 2.7%, and revenue could decline 4.4%. Sequential numbers are not comparable as the December quarter covers the festive season and early winters whereas the March quarter covers the winters and early summers.

Godrej Consumer Products had reported a net profit of nearly INR 5 billion in the December quarter on revenues of INR 37.7 billion. The company will declare its results for the quarter and year ended March on Tuesday.

Among brokerages covering the company, HDFC Securities Ltd. estimated the net profit to be the highest at INR 5.7 billion, and Nuvama Wealth Management Ltd. estimated the lowest net profit at INR 4.5 billion. In contrast, Nuvama has the highest revenue projection of INR 36.7 billion, and HDFC Securities has the lowest revenue estimate of INR 33.7 billion. 

In its latest quarterly update, Godrej Consumer Products said it is expecting to report a high-single digit sales growth after adjusting for the movement of the rupee against global currencies and that the underlying volume growth could be in mid-single digits. The company said it remains on track to achieve its objective of reviving volume growth, maintaining operating margins in India, and maintaining growth in global operations. In India, underlying volume growth is expected to be in mid-single digits and revenue growth is expected to be in high single digits, mainly on account of price increases. 

Based on the company's own estimation of its Jan-Mar performance, Nuvama said Godrej Consumer may report a 3-4% on-year volume growth in India. It expects strong volume growth of high single digits or early double digits in liquid detergents, hair colour and air fresheners, and a 3-4% volume growth in home improvement products. In soaps, however, volume could decline by low single digits, Nuvama said in a note. 

Kotak Institutional Equities said it expects Godrej Consumer to report an 8% on-year sales growth in its standalone business led by price increases. In its global business, Indonesia could report high single-digit volume growth, and in Africa, West Asia, US, and Latin America, the company could report low-to-mid single-digit volume growth. Thus, at a total level, sales could grow 7% on year as compared to 3% in the December quarter and just 1.8% in the September quarter.

HDFC Securities, however, said that the African, West Asian, US, and Latin American business is expected to report double-digit sales and volume growth. 

Rural demand gradually recovered in the March quarter, while urban demand has continued to be weak, and this is likely to weigh on volume trajectory of consumer goods companies, JM Financial Institutional Securities Pvt. Ltd. said in a note. Pricing growth, which turned positive in the March quarter, is expected to further improve in the coming quarters aided by price hikes that should support sales growth for some companies including Godrej Consumer. 

Godrej Consumer is expected to report an earnings before interest, tax, depreciation, and amortisation of INR 7.3 billion, according to the average of estimates from 12 brokerages. The highest estimate of INR 7.6 billion is from HDFC Securities and the lowest of INR 7.2 billion is from Nuvama. 

Nuvama said domestic EBITDA margins could fall 500 basis points on year to 22% due to palm oil inflation, which would hurt the margins from soaps which comprise around one-third of Godrej Consumer's domestic business. At a consolidated level, however, the EBITDA could decline 5.8%. EBITDA margins may fall by 296 bps to 19.5% and gross margins could dip by 192 bps to 54.2%, Nuvama said. 

On Friday, shares of Godrej Consumer Products closed 0.3% down at INR 1,256.7 on the National Stock Exchange.

Following are the Jan-Mar earnings estimates for Godrej Consumer Products based on reports from seven brokerages in descending order of the estimate of net profit 
 

End

Edited by Tanima Banerjee

For users of real-time market data terminals, Informist news is available exclusively on the NSE Cogencis WorkStation.

Cogencis news is now Informist news. This follows the acquisition of Cogencis Information Services Ltd by NSE Data & Analytics Ltd, a 100% subsidiary of the National Stock Exchange of India Ltd. As a part of the transaction, the news department of Cogencis has been sold to Informist Media Pvt Ltd.

Informist Media Tel +91 (22) 6985-4000 /+91 (11) 4220-1000

Send comments to feedback@informistmedia.com

© Informist Media Pvt. Ltd. 2025. All rights reserved.