Godrej Consumer Products Eyes Mid-Single Digit Volume Growth in Q4

FMCG major Godrej Consumer Products Ltd (GCPL) announced on Friday that it anticipates achieving mid-single digit volume growth on a consolidated basis during the December quarter. The company provided a quarterly update on its performance, highlighting key trends and challenges across its various businesses.

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Steady Growth in Domestic Market

In the domestic market, GCPL's organic business demonstrated consistent underlying volume growth in the mid-single digit range. Notably, its inorganic businesses, including Park Avenue and KamaSutra, reported an impressive double-digit volume growth. This growth was well-distributed across both home care and personal care segments. Park Avenue and KamaSutra brands continued their strong performance and remained on track to meet their full-year targets.

Indonesia Continues to Excel

GCPL's Indonesia business, the second largest market after India, maintained its remarkable performance with close to double-digit volume growth and high-single-digit constant currency sales growth. This sustained growth trajectory reflects the company's effective strategies and strong market presence in Indonesia.

Challenges in GAUM and LATAM

The GAUM (Godrej Africa, US, and Middle East) business experienced a flattish to mild decline in volume growth. This was primarily attributed to trade destocking in certain geographies that GCPL plans to restructure in the fourth quarter. Despite sustaining double-digit constant currency sales growth, the impact of the Naira devaluation resulted in a high-single-digit sales decline.

In Latin America (LATAM), the business revenue was severely affected by the sharp devaluation of the Argentinian Peso. The peso's devaluation from 361 to 808 significantly impacted revenue over the past nine months due to hyperinflation. This challenging environment is expected to have a negative impact of mid-single digit on the consolidated sales. Nevertheless, it is noteworthy that the LATAM business continued to deliver positive volume growth amidst these challenges.

Consolidated Outlook

At a consolidated level, GCPL expects to achieve mid-single digit volume growth and double-digit constant currency sales growth. However, due to currency and hyperinflation accounting impacts in GAUM and LATAM, the company anticipates a low-single-digit sales decline in INR terms.

Quarterly Update and Financial Results

GCPL clarified that this quarterly update provides a general overview of the operating performance and demand trends during the quarter ended December 31, 2023. A more detailed performance update will be provided after the Board of Directors approves the third quarter financial results.

This article summarizes the key highlights from Godrej Consumer Products Ltd's quarterly update, offering insights into the company's performance across various markets and segments.