Godrej Consumer Products Limited (GCPL) has released its Q1 financial results, showcasing a mixed performance with notable growth in revenue but a slight decline in profitability.

Key Highlights

• Consolidated revenue grew by 10% year-on-year
• Underlying volume growth of 8%
• Consolidated EBITDA declined by 3%
• India business revenue increased by 8% with 5% volume growth
• Africa business showed strong performance with 30% sales growth

Segment Performance

India Business

The India business demonstrated resilience with an 8% revenue growth and a 5% increase in volume. However, the segment faced challenges as evidenced by a 6% decline in EBITDA. Notably, the ex-soaps business in India performed exceptionally well, achieving mid-teens underlying volume growth.

Household Insecticides

The Household Insecticides segment delivered a robust performance:

• High single-digit volume growth
• Double-digit growth in the Electrics segment
• Gained market share through the new RNF molecule

Soaps Segment

The soaps segment encountered difficulties due to:

• Grammage cuts
• Poor seasonal conditions in North India

Geographic Performance

Africa emerged as a strong performer with impressive sales and EBITDA growth. Latin America achieved high single-digit underlying volume growth while maintaining double-digit EBITDA margins. However, Indonesia faced challenges due to macroeconomic conditions and competitive pressures.

Product Innovations

GCPL continued its focus on innovation, launching several new products:

• Bloq antiperspirant
• AirPlug
• Amazon Woods 4X

Cost Management

The company reported A&P (Advertising and Promotion) savings of 150-200 basis points, contributing to operational efficiency.

Future Outlook

Management has provided a positive outlook for the future:

• Expectation of mid-to-high single-digit underlying volume growth for the standalone business
• Anticipation of double-digit consolidated EBITDA growth
• Sequential improvement expected throughout the year

Despite the mixed results in Q1, Godrej Consumer Products Limited demonstrates resilience in key segments and geographic markets. The company's focus on innovation, cost management, and strategic growth in high-performing regions positions it to navigate challenges and capitalize on opportunities in the consumer goods sector.

Godrej Consumer Products Limited (GCPL), a leading emerging markets FMCG company, has reported a robust performance for the first quarter, with double-digit topline growth driven by strong volume performance across countries.

Financial Highlights

• Consolidated sales grew by 10% in INR terms and 11% in constant currency terms year-on-year
• Underlying volume growth of 8% on a consolidated basis
• Standalone business in India saw sales growth of 8% with a 5% underlying volume growth
• Africa, USA, and Middle East organic sales grew 30% in INR terms
• Latin America and Others segment grew sales by 18% in INR terms

Segment Performance

India Business

The India business delivered a revenue growth of 8%, with volume growth at 5%. Excluding soaps, the underlying volume growth was in the teens. Key highlights include:

• Household Insecticides: High single-digit volume growth, with Electrics growing in double digits
• Air Fresheners: Continued strong double-digit growth across formats
• Fabric Care: Strong double-digit volume growth for the sixth consecutive quarter
• Hair Colour: Strong double-digit performance led by Crème and Shampoo Hair Colour

International Business

• Indonesia: Faced challenges due to macro headwinds and competitive pricing pressures, resulting in flat underlying volume growth and a 4% sales decline
• Africa: Continued solid performance with sales growing at 30% and EBITDA growing at 15%
• Latin America: Performed exceptionally well with high single-digit underlying volume growth

Management Commentary

Sudhir Sitapati, Managing Director and CEO of GCPL, commented on the results: "Q1 has been a good quarter for GCPL. In particular, our Standalone, excluding soaps, business has had an excellent performance, delivering an underlying volume growth around teens, led by robust broad-based performance."

He added, "We expect performance to improve sequentially with the second half performance expected to be better than the first half. We are on track to deliver mid-high-single digit UVG for our Standalone business, high-single digit Consolidated INR revenue growth and double-digit Consolidated EBITDA growth for the full year."

Future Outlook

GCPL expects business volume growth in India to increase from mid-single-digits to high-single-digits in the upcoming quarters. The company remains committed to its strategy of driving profitable and sustainable volume growth across its portfolio through category development.

Dividend Declaration

The Board of Directors has declared an interim dividend of ₹5.00 per share (500% on face value of ₹1.00 each). The record date for the dividend is set for August 13, with payment to be made on or before September 6.

Godrej Consumer Products continues to focus on bringing the goodness of health and beauty to consumers in emerging markets, while maintaining its commitment to sustainability and responsible growth.