Godrej Consumer Products Limited (GCPL) demonstrated resilience in its Q2 performance, navigating through GST transition impacts in India and macroeconomic challenges in Indonesia. The company reported a 4% year-on-year growth in consolidated sales, supported by a 3% increase in underlying volume growth.

Financial Highlights

• Consolidated revenue grew by 4% to ₹3,802.46 crore
• EBITDA margins stood at 19.3%
• Net profit (without exceptional items and one-offs) declined by 2% year-on-year

Segment Performance

India Business

• Sales grew by 4% to ₹2,362.00 crore with a 3% volume growth
• Home Care segment grew by 6%
• Personal Care segment declined by 2%, primarily due to GST transition impacts

The recent GST rate reduction, while causing short-term trade disruptions, may strengthen long-term consumer demand. GCPL has already passed on the benefits to consumers.

International Business

• Indonesia: Delivered 2% underlying volume growth, but sales declined by 7% in constant currency terms
• Africa, USA, and Middle East: Reported 25% sales growth in INR terms (15% in constant currency)

Category Insights

Home Care

• Household Insecticides: Electrics gaining market share; Incense sticks now the largest branded stick in the category
• Air Fresheners: Continued strong growth trajectory and market leadership
• Fabric Care: Delivered strong growth momentum and market share gains
• New Launch: Entered the Toilet Cleaners category with Godrej Spic

Personal Care

• Personal Wash: Most impacted by GST transition but continued to gain market share
• Hair Colour: Continued market share gains across Crème and Shampoo Hair Colour
• Perfumes & Deodorants: Delivered strong performance

Strategic Acquisition

GCPL announced the acquisition of the 'Muuchstac' brand, a fast-growing men's grooming brand with a strong position in the men's facewash segment. This strategic move aims to strengthen GCPL's presence in the high-growth men's grooming category.

Key acquisition details:

• Muuchstac recorded revenues of approximately ₹80.00 crore over twelve months
• EBITDA of around ₹30.00 crore, reflecting strong profitability
• Acquisition to be completed via slump sale from Triology Solutions Private Limited

Outlook

GCPL expects performance to strengthen sequentially, with the second half projected to deliver a stronger trajectory. The company remains confident in achieving:

• High single-digit underlying volume growth in the Standalone business
• High single-digit revenue growth at a consolidated level
• Double-digit EBITDA growth for India (Standalone) and GAUM businesses

Despite temporary pressures in international markets, GCPL maintains confidence in its strategy, portfolio resilience, and brand strength to deliver sustainable and profitable growth in the coming periods.

Sudhir Sitapati, Managing Director and CEO of GCPL, commented, "Q2 has been a resilient quarter for Godrej Consumer Products Limited, especially given the backdrop of the GST transition in India and continued macroeconomic challenges in Indonesia. Our India business, excluding soaps, has delivered double-digit underlying volume growth, reflecting the strength of our core portfolio and execution."

As GCPL navigates through these transitional challenges, the company's focus on innovation, operational excellence, and strategic acquisitions positions it well for future growth in the dynamic FMCG landscape.

Financial Performance Table

Godrej Consumer Products Limited (GCPL) has announced its financial results for the second quarter of fiscal year 2026, demonstrating resilience amid the GST transition in India and ongoing macroeconomic challenges in Indonesia. The company also revealed its strategic acquisition of the Muuchstac brand, marking a significant step into the fast-growing men's grooming segment.

Q2 FY2026 Financial Highlights

• Consolidated sales grew by 4% year-on-year to ₹3,802.46 crore, supported by a 3% increase in underlying volume growth.
• India business sales increased by 4% to ₹2,362.22 crore, with a 3% volume growth.
• EBITDA margins stood at 19.3%, with a 3% decline in consolidated EBITDA.
• Net profit (without exceptional items and one-offs) decreased by 2% year-on-year.

Segment Performance

India Business

• Home Care segment grew by 6%, driven by strong performance in Air Fresheners and Fabric Care.
• Personal Care segment declined by 2%, primarily due to the GST transition impact on soaps.
• The company launched Godrej Spic, marking its entry into the Toilet Cleaner category.

International Business

• Indonesia sales declined by 7% in constant currency terms, facing ongoing pricing pressures.
• Africa, USA, and Middle East delivered 25% sales growth in INR terms (15% in constant currency).

GST Transition Impact

The recent GST rate reduction led to short-term trade disruptions as channels adjusted to new pricing and cleared old inventory. This particularly affected the Soaps and Hair Colour categories. GCPL expects demand to normalize in the coming months as trade channels stabilize.

Muuchstac Brand Acquisition

GCPL announced the acquisition of the FMCG business under the 'Muuchstac' brand via slump sale from Trilogy Solutions Private Limited. Key highlights of the acquisition include:

• Muuchstac is one of India's fastest-growing men's grooming brands, with a strong position in the men's facewash segment.
• The brand recorded revenues of approximately ₹80.00 crore and adjusted EBITDA of around ₹30.00 crore over the twelve months ending September 2025.
• The acquisition will be completed in two tranches:
  1. Initial payment of ₹289.00 crore
  2. Performance-based second tranche of approximately ₹160.00 crore after 12 months

Management Commentary

Sudhir Sitapati, Managing Director and CEO of GCPL, commented on the results: "Q2 FY26 has been a resilient quarter for Godrej Consumer Products Limited, especially given the backdrop of the GST transition in India and continued macroeconomic challenges in Indonesia. Despite these headwinds, our India business, excluding soaps, has delivered double-digit underlying volume growth, reflecting the strength of our core portfolio and execution."

Regarding the Muuchstac acquisition, Sitapati added: "This acquisition enhances our participation in the fast-growing men's grooming segment and supports our vision of building a future-ready, innovation-led GCPL."

Growth Strategy and Outlook

Godrej Consumer Products has provided guidance for mid-to-high single-digit volume growth. The company plans to drive this growth through innovation across its home, personal, and household care product categories. The strategy includes:

• Accelerating rural market penetration
• Premiumization of products
• Expanding its African portfolio to sustain margin improvement

GCPL expects its performance to strengthen sequentially through FY26, with the second half delivering a stronger trajectory than the first. The company remains confident in achieving high single-digit underlying volume growth in its Standalone business and high single-digit revenue growth at a consolidated level.

The acquisition of Muuchstac is expected to leverage GCPL's distribution network and innovation capabilities to accelerate the brand's growth, particularly in offline channels where significant expansion opportunities exist.