Godrej Consumer’s Q3 PAT dips 14% as volumes stagnate, costs rise
The slowdown in urban consumption and ‘temporary headwinds’ saw FMCG company Godrej Consumer Products’ third quarter consolidated net profit slide 14.2 per cent on year to ₹498 crore, and a subdued 3 per cent rise in revenue as volumes remained stagnant. The company’s total revenue from operations in the December quarter was ₹3,768 crore.
Sequentially the net profit rose a little over 1 per cent, while revenue was not much changed. The maker of popular products such as Cinthol and Good Knight said increase in raw material prices hit its margins.
During the quarter, increase in raw material price impacted the company’s margin, which shrank 300 basis points to 20.2 per cent.
slowdown in consumption
“Demand conditions in India have witnessed temporary headwinds over the past few months, led by a slowdown in urban consumption. A surge in palm oil prices by more than 40 per cent along with weak seasonality in Household Insecticides has led to a flat underlying volume growth and mid-single-digit underlying sales growth for our Standalone business. The surge in palm oil costs is negatively impacting our EBITDA margin,” said Sudhir Sitapati, Managing Director and CEO, of GCPL.
Further, the company announced an interim dividend of ₹5 per share (500 per cent on equity shares of the face value of Re. 1/- each) for the financial year 2024-25 The dividend will be paid on or before Sunday, February 23, 2025.
The consolidated organic sales rose 6 per cent. In the domestic market, the company’s home care grew by 4 per cent, while personal care grew by 2 per cent.
“Premium formats in household insecticides were impacted due to Urban slowdown and category seasonality, however, we have started to gain market share within premium formats, which suggests that the RNF molecule is working amongst consumers. We remain focused on driving volume-led growth, healthy investments in our brands and improvement in profitability,” added Sudhir.
In international business, in Indonesia, the company’s sales grew by 8 per cent in constant currency terms and 9 per cent in Indian rupee terms while volume grew by 6 per cent. In Africa, the US and the Middle East the company reported a 1 per cent growth in sales in constant currency terms while it declined by 8 per cent in INR terms.
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