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Informist, Friday, Oct. 31, 2025

 

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--Godrej Consumer: Q2 was resilient despite GST cuts, challenges in Indonesia 
--CONTEXT: Godrej Consumer mgmt's comments in post-earnings analyst concall 
--Godrej Consumer: Indonesia business continues to see pricing pressures 
--Godrej Consumer: H2 performance seen better than H1 
--Godrej Consumer: Well positioned to deliver profitable growth going ahead 
--Godrej Consumer: Palm oil prices relatively stable 
--Godrej Consumer: Continued to gain market share in soap business 
--Godrej Consumer: Believe co's soap ops will continue to outperform market 
--Godrej Consumer: See volume growth in soaps continuing in coming quarters 
--Godrej Consumer: Volume growth excluding soap in double digit in last 4 qtrs 
--Godrej Consumer: Will work for double-digit EBITDA growth in Africa ops 
--Godrej Consumer: See double-digit growth in consol EBITDA for FY26 
--Godrej Consumer: Household insecticides ops seen growing faster than before 
--Godrej Consumer:Household insecticide ops seen growing in high single digit 
--Godrej Consumer: Muuchstac brand has double-digit market share

 

By Gopika Balasubramanium and Anjana Therese Antony

 

MUMBAI –  Godrej Consumer Products Ltd. sees the earnings before interest, tax, depreciation, and amortisation margin for its India operations at the lower end of 24-26% for the second half of 2025-26 (Apr-Mar), a top official told analysts in a post-earnings call. For FY27, the company expects better margin, assuming palm oil prices remain stable. The Cinthol-maker said margin improvement in its relatively low-margin porfolios, especially laundary and incense sticks, will also drive the metric's expansion in the next financial year. 

 

The company expects the operating margin of India business to be better in Oct-Mar as palm oil prices are relatively stable, a trend that is expected to continue in the second half of the financial year. Structurally, pressure in palm oil prices, seasonality of household insecticides business, and volatility in currency movements are the three key risks to its overall operations. 

Godrej Consumer said its performance in the September quarter was resilient despite the government's goods and services tax cuts and challenges in the Indonesian market. While the GST reductions are expected to aid growth in the long term, the company's standalone revenue saw a 3-4% hit due to these rationalisation in the reporting quarter. The GST cut, which came into effect on Sept. 22, led to short-term trade disruptions as dealers adjusted to new pricing and cleared old inventory. This also affected the company's soap and hair colour sales.

 

Speaking about its FY26 consolidated profitability, the company said it expects "good EBITDA growth". While the growth in the metric is expected to be in double digits, the company also said this figure "may be a little lower than what we originally guided at the beginning of the year." The second half of FY26 is expected to fare better for the company than the first half, it said. 

 

During the quarter, the company's personal wash segment, which mainly comprises soaps, took the maximum hit due to the GST cut to 5% from 18?rlier. However, the company continued to gain market share in soaps and other key categories. The soap vertical is slowly upgrading into body wash, hand wash, and face wash businesses. 

 

The Cinthol maker is confident that it will continue to outperform the soap industry going forward and anticipates "pretty sharp volume growth" in the next few quarters. The company expects to end FY26 with a 7-8% growth in the soap volume. 

 

Talking about its latest acquisition of Triology Solutions Pvt. Ltd., which markets the men's grooming brand Muuchstac, Godrej Consumer said it sees growth potential in men's facewash category. This was the main rationale behind acquiring Muuchstac. The company said 95% of this brand's sales came from a single stock keeping unit and currently has a market share to the tune of around 30% online. Most of the Muuchstac's sales is from tier-1 and tier-2 cities, mainly through e-commerce platforms such as Meesho and Flipkart. 

 

Godrej Consumer sees household insecticides business growing faster than before. This segment is expected to grow in high single digit from its current single-digit rise. Its electrics business under the household insecticide division gained market share and incense sticks continued to scale up, the company said. 

 

FOREIGN GEOGRAPHIES

Godrej Consumer's Indonesian business continued to face macroeconomic and pricing pressures in the reporting quarter amid the slowdown in the country's economy. The sales volume growth in the next next few quarters in Indonesia is likely to be between 2% and 4%. The slowdown in this market started three quarters ago and there has been a lot of price competition by retailers and companies since then, the management said. While the company expects the delivery in Indonesia to improve only a little during Oct-Mar, it will possibly take more time to go back to the earlier volume growth of 4-5%. During the September quarter, the Indonesian market accounted for nearly 13% of the company's total sales. 

 

For its operations in Africa, the company aims to work towards a double-digit growth in the EBITDA in constant currency terms. The margin of the African business is currently at 14% and expects it to remain in mid teens in the medium term. "A very strong growth out there (Africa), making up for whatever you missed out on the other businesses in international (market)," the company said.  

 

After market hours Friday, the fast-moving consumer goods company reported a consolidated net profit of INR 4.59 billion for the September quarter on a revenue of INR 38.25 billion. Shares of the company closed slightly higher at INR 1,118.60 on the National Stock Exchange.  End

 

Edited by Akul Nishant Akhoury

 

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