Godrej Consumer Products reports 6% sales growth in 2Q FY 2024

Godrej Consumer Products Limited (GCPL), a leading emerging markets FMCG company, today revealed its financial results for the quarter ending September 30, 2023. The company reported a robust 6% growth in consolidated sales, underpinned by a substantial 10% rise in volume. This figure represents a remarkable constant currency growth of 16% year-on-year. Particularly noteworthy was the company’s performance in India, where sales increased by 9%, fueled by an 11% growth in volume.

Diverse Regional Performance with Significant Gains

In the Indonesian market, Godrej Consumer Products continued its upward trajectory with a 16% rise in sales in INR terms and 14% in constant currency terms. However, the sales in Africa, USA, and Middle East displayed a nuanced picture: a decline of 5% in INR terms but an impressive 17% growth in constant currency terms. The Latin American and SAARC regions also saw substantial growth – 5% in INR and a staggering 99% in constant currency terms.

EBITDA and Net Profit Increases Reflect Financial Resilience

Godrej Consumer Products’ consolidated EBITDA and net profit for 2Q FY 2024 also mirrored this positive trend. The EBITDA saw a year-on-year increase of 30%, while the consolidated net profit, excluding exceptional items and one-offs, grew by 17%. In a significant move for shareholders, the Board of Directors declared an interim dividend of 500% (₹5 per share), resulting in a payout of ₹511 crore.

CEO Insights: Focused Growth and Brand Investments

Godrej Consumer Products Managing Director and CEO, Sudhir Sitapati, commented on the performance, stating, “We delivered a steady performance in 2Q FY2024, despite the tough operating environment.” He highlighted the double-digit volume growth of 10% and the 6% sales increase. Sitapati emphasized the company’s commitment to driving volume-led growth and investing in brand health and profitability, amidst a challenging market scenario.

Sector-wise Performance Breakdown

The Home Care and Personal Care sectors of GCPL also reported varied results. The Home Care sector grew by 5%, with the Household Insecticides segment showing flat growth due to poor monsoons. In contrast, the non-mosquito portfolio performed strongly. Personal Care, however, witnessed a marginal decline of 1%, with mixed results across different product categories.

Business Updates Across Geographies

In terms of geographical performance, Indonesia’s sales growth and EBITDA margins reflect effective media investments and portfolio renovations. For the Africa, USA, and Middle East cluster, despite the devaluation of Naira impacting INR term performance, constant currency terms indicated robust growth in FMCG categories.

Closing Summary:

Godrej Consumer Products 2Q FY 2024 financial results demonstrate a resilient and dynamic performance across diverse emerging markets, with robust sales and volume growth, particularly in India and Indonesia. The company’s focus on brand investment, strategic market approaches, and commitment to shareholders signifies a strong positioning in the FMCG sector.