Godrej Consumer Q3 Results: Profit Beats Estimates, Margin Improves

Godrej Consumer Products' consolidated net profit rose 3.5% over the previous year to Rs 546.3 crore.
<div class="paragraphs"><p>A range of Godrej Consumer products in a basket. (Source: Usha Kunji/BQ Prime)</p></div>
A range of Godrej Consumer products in a basket. (Source: Usha Kunji/BQ Prime)

Godrej Consumer Products Ltd.’s third-quarter profit rose, beating estimates, as key input costs and consumer prices stabilised.

Consolidated net profit of the maker of Good Knight mosquito repellent and Cinthol soaps rose 3.5% over the previous year to Rs 546.34 crore in the three months ended December, according to an exchange filing. That compares with the Rs 455.56 crore consensus estimate of analysts tracked by Bloomberg.

Profits, before exceptional items and one-offs, grew 10% to Rs 672.5 crore.

Key Highlights: Godrej Consumer Products Q3 FY23 (YoY)

  • Revenue rose 9% to Rs 3598.92 crore against an estimate of Rs 3,604.6 crore.

  • Operating profit rose 10% to Rs 767.5 crore, compared to a projection of Rs 693.6 crore.

  • Margin came in at 21.3% vs 21.2%.

  • Total expenses climbed 9% to Rs 2,970 crore.

"With commodity pressures abating, we expect a gradual recovery in consumption, expansion in gross margins, upfront marketing investments, and improvements in profitability in the coming quarters," said Sudhir Sitapati, managing director and chief executive officer, Godrej Consumer.

Underlying volumes grew 1% over the previous year, according to the company’s presentation, after declining for at least the last five quarters.

Sales from India grew 11% over the previous year, driven by price hikes, with domestic volume growth at 3%, according to the company.

Category-wise, personal care grew 14%, while home care grew 10%. Unbranded products and exports saw a 9% decline in sales during the quarter.

Among other regions:

  • Africa, USA and Middle East business continued its strong growth trajectory, growing at 14% in rupee terms and 23% in constant currency terms.

  • Indonesia sales fell 3.1% to Rs 433.32 crore.

  • Latin America and SAARC regions, too, reported an 8% dip in sales.

"Performance in our Indonesian business is gradually recovering," said Sitapati, adding that ex-hygiene category, the region saw 2% growth in constant currency. "We continue to have a healthy balance sheet and are also net cash positive. We are on track in our journey to reduce inventory and wasted cost and are deploying this to drive profitable and sustainable volume growth across our portfolio through category development."

Shares of Godrej Consumer Products rose 1.11% on Tuesday against a flat benchmark, the Nifty 50.


Sesa is a Principal Correspondent covering FMCG & Retai...more
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