Godrej Consumer Products Limited - Quarterly Update for 4QFY22

Some of our short term challenges such as unprecedented global commodity inflation and the performance of our Indonesia business, continued to play out during the quarter, impacting consumption and margins.

The Indian FMCG industry witnessed a consumption slowdown over the last few months. The sector continued to be hit hard by higher inflation levels, leading to successive price increases, and impacting volumes. Despite this, we remain competitive given the relatively non-discretionary, mass pricing of our portfolio. We have been gaining market share in 85% of our categories.

In India, we expect to deliver close to double-digit sales growth, driven entirely by pricing. Our 2-year CAGR would be in early twenties. We witnessed a mixed performance in our Personal Care and Home Care categories. Personal Care sustained its double-digit growth trajectory, primarily led by pricing in Personal Wash. Home Care witnessed a soft performance on a high base, impacted by a relatively muted season for Home Insecticides and the discretionary nature of Air Fresheners.

In Indonesia, with Hygiene performance waning after COVID-19 and a large Hygiene comparator in base, we expect a sales decline in the high teens, in constant currency terms. While the short term may continue to remain challenging, we are putting building blocks in place to drive category development and general trade distribution, to ensure gradual recovery in the medium term.

In Godrej Africa, USA and Middle East, we continued our growth momentum across most of our key countries of operations. We expect to deliver a constant currency sales growth close to the mid-teens. We also continue to focus on driving sustainable, profitable sales growth.

We expect strong double-digit constant currency sales growth in our Latin America business. Our SAARC business performance was soft.

At a consolidated level, we continue to leverage our category and geographic portfolio. We expect to deliver a higher than mid-single-digit sales growth and a 2-year CAGR around midteens. In FY23, we expect to deliver early double-digit sales growth. On the profitability front, we expect lower year-on-year EBITDA margins during the quarter. This is due to input inflation and our weak performance in Indonesia.

Shares of Godrej Consumer Products Limited was last trading in BSE at Rs. 752.75 as compared to the previous close of Rs. 772.05. The total number of shares traded during the day was 66251 in over 3950 trades.

The stock hit an intraday high of Rs. 768.00 and intraday low of 749.95. The net turnover during the day was Rs. 50165704.00.

The above update provides an overall summary of the operating performance and demand trends during the quarter ended March 31, 2022.

Source : Equity Bulls

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GodrejConsumerProducts INE102D01028 GCPL QuarterlyUpdate Q4FY22