Godrej Consumer Products Q2 Net Profit Falls 25% To Rs 359 Crore

FMCG major Godrej Consumer Products Ltd. on Tuesday reported a decline of 25.06% in its consolidated net profit at Rs 358.86 crore for the quarter ended September.

It had posted a net profit of Rs 478.89 crore in the July-September quarter a year ago, GCPL said in a regulatory filing.

The revenue from the sale of products of the Godrej Group's FMCG arm was up 7% at Rs 3,364.45 crore during the quarter under review, as against Rs 3,143.61 crore in the corresponding period last fiscal.

GCPL's total expenses were 14.41% up at Rs 2,951.38 crore in the September quarter. It was reported at Rs 2,579.45 crore last year.

"Our overall Ebitda declined by 15% driven by consumption of high cost inventory, upfront marketing investments and a weak performance in our Indonesia, Latin America and SAARC businesses. PAT without exceptional items and one-offs declined by 21%," GCPL Managing Director and CEO Sudhir Sitapati said.

The company's India revenue was up 8% to Rs 1,985.03 crore in the September quarter, from Rs 1,838.14 crore in the preceding year.

"From a category perspective, in India, we saw continued momentum in personal care, which grew by 18%. Home care grew by 2%," he said.

Revenue from the Indonesian market was down 8.15% to Rs 408.66 crore, as compared to Rs 444.93 crore in the previous year.

Its revenue from Africa (including Strength of Nature) market was up 15% at Rs 858.66 crore over Rs 748.54 crore.

Revenue from other markets was up marginally to Rs 174.40 crore in the second quarter of FY23, as against Rs 172.72 crore earlier.

"Our Africa, the U.S. and Middle East business continued its robust growth trajectory, growing at 15% in INR and 13% in constant currency terms. Performance in our Indonesian business was weak, declining by 8% in INR and 11% in constant currency terms," Sitapati said.

With inflationary pressures abating, Sitapati said he expects a recovery in consumption and gross margins alongside continued higher marketing investments with a significant focus on reducing controllable costs.

"We continue to have a healthy balance sheet and our net debt to equity ratio continues to drop. We are on a journey to reduce inventory and wasted cost and are deploying this to drive profitable and sustainable volume growth across our portfolio through category development," he said.