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Informist, Saturday, Jan. 17, 2026

 

By Pallavi Singhal

 

NEW DELHI – Easing of disruptions from the goods and services tax cut and improving volumes are expected to lift the December quarter earnings of Godrej Consumer Products Ltd., with profit growth seen outpacing revenue growth, according to brokerages. A recovery in soaps and strong growth in home care are also expected to support performance.

 

Godrej Consumer Products' consolidated net profit is expected to rise 16.5% on year to about INR 5.9 billion for the December quarter, according to the average of estimates from 10 brokerages. On a sequential basis, the net profit is expected to rise 20% on the back of volume recovery and margin expansion. 

 

The company's consolidated revenue for the reporting quarter is estimated at INR 41.2 billion, implying a 9.3% growth on year, the estimates show. This will be a 7.6% rise sequentially as primary sales normalised in November and December after the trade disruptions caused by the GST cut in October. Since the GST cut took effect several days after it was announced, it caused two types of disruptions for several businesses. First, consumers put off purchases in anticipation of lower prices, and second, distributors and retailers cut back new orders in a bid to liquidate the existing stock on which higher GST rates applied.

 

The highest estimate for Godrej Consumer's December quarter net profit, at around INR 6.1 billion by Motilal Oswal Financial Services, factors in stronger operating leverage in the India business, a sharper recovery in soaps volumes, and limited margin pressure in Indonesia. The lowest estimate, at INR 5.6 billion by Nomura Equity Research, assumes a slower recovery in urban demand, and continued pricing pressure in Indonesia. For revenue, estimates range from INR 40.2 billion to INR 42.4 billion. 

 

The variation in estimates also reflects how brokerages assess the recovery of demand during the quarter after the GST rate cut, which came into effect from Sept. 22. GST-related trade adjustments weighed on sales in October, as distributors and retailers focused on liquidating higher-priced inventory following the GST rate cut.

 

The company had said in its previous earnings commentary that these adjustments were temporary. However, Nomura estimates that the reporting quarter played out in two phases. The first half remained impacted by GST transition issues. Re-stocking improved sales momentum from mid-November onwards. The full impact of higher demand after the GST cut is likely to be visible from the March quarter, according to the brokerage.

 

Brokerages expect Godrej Consumer's India business to deliver about 8% growth in volumes in the December quarter. In the same quarter a year ago, the company's volume growth had remained flat. Nomura estimates Godrej Consumer's volume growth at about 8%, placing it among the stronger performers in the sector. While its peer Marico's volumes are estimated to grow about 8.5%, Colgate-Palmolive (India)'s volumes are expected to fall 3%, Nomura data showed. Pricing growth for Godrej Consumer is expected to remain close to zero as the company passed on the GST rate cut benefits to consumers. Godrej Consumer prioritised volumes over pricing to protect market share, the brokerage said in its report.

 

The home care portfolio, which contributes 41% to the company's India sales, is expected to deliver around 10–12% value growth, according to Systematix Shares and Stocks (India) Ltd. and Emkay Global Financial Services Ltd., led by household insecticides and air care portfolios. Nomura said household insecticides performed better than expected despite a harsh winter. Seasonal demand in southern India also supported volumes.

 

Godrej Consumer's personal care business is expected to grow 5% in the reporting quarter. This segment contributes about 54% of domestic revenues. The soaps portfolio, which accounts for about one-third of the India business, is expected to recover. Soaps were impacted in the September quarter due to destocking after the GST cut and an earlier reduction in pack sizes. Brokerages said these effects have begun to fade in the December quarter and should disappear by March. The domestic business contributes about 64% of the company's consolidated turnover.

 

The company's Indonesia business, which contributes about 12% of the annual revenue, is expected to remain under pressure. Nuvama Wealth Management Ltd. estimates about 2% volume growth, but value growth is seen declining 3–5% due to pricing pressure. Emkay estimates revenue of the Indonesia business to fall about 5%. Brokerages said though price competition remains intense, the worst may be behind it.

 

The Godrej Africa, USA, Middle-east business is expected to outperform. Brokerages estimate 20–25% revenue growth due to  a low base. Strong growth in Africa is expected to partly offset weakness in Indonesia, according to Nuvama.

 

Godrej Consumer's earnings before interest, tax, depreciation, and amortisation are estimated at INR 8.6 billion, based on the average of estimates of nine brokerages. The highest estimate is INR 9 billion by Nuvama, while the lowest estimate is INR 8.3 billion by Nomura. 

 

Emkay expects Godrej Consumer's consolidated EBITDA margin to rise about 180 basis points on year to 24%. Margin expansion is expected to be driven by the India business. Nomura expects India gross margins to remain stable at about 54–55%.  A favourable base and easing input costs are expected to support margins.

 

Nuvama said Malaysia's crude palm oil production is expected to exceed 20 million tonnes in 2025. Higher supply is likely to ease input cost pressure for soap makers as palm oil derivatives are a key input for soap makers, including Godrej Consumer. While the company does not use crude palm oil directly, brokerages said improved supply conditions remain beneficial for margins.

 

Shares of Godrej Consumer ended Friday at INR 1,236.90 on the National Stock Exchange, up 0.8%. The shares are up nearly 9.6% since the company announced its September quarter earnings on Oct. 31. The company will announce its Oct-Dec earnings on Friday.

 

Of the 10 research reports on the company available with Informist, nine have a 'buy' recommendation on the stock at an average target price of INR 1,371. Only one brokerage has a 'hold' recommendation with a target price of INR 1,612.

 

The following are the Oct-Dec earnings estimates for Godrej Consumer from 10 brokerages in descending order of the estimate of net profit in INR million:

 

Brokerage	Net sales	Net profit	EBITDA
Motilal Oswal Financial Services Ltd	41,602	6,095	8,631
Mirae Asset Sharekhan Ltd	41,580	6,080	--
Elara Securities (India) Pvt Ltd	40,864	6,031	8,676
Kotak Securities Ltd	41,364	5,974	8,760
Nuvama Wealth Management Ltd	40,680	5,873	8,950
Systematix Shares and Stocks (India) Ltd	41,058	5,784	8,497
JM Financial Institutional Securities Pvt Ltd	41,097	5,750	8,539
Nirmal Bang Equities Pvt Ltd	42,376.00	5,749	8,458
Emkay Global Financial Services Ltd	40,960	5,719	8,526
Nomura Equity Research	40,204	5,640	8,276
Average	30,722.44	2,112.89	5,044.22

 

End

 

Edited by Tanima Banerjee

 

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