Godrej Consumer Products Q2 net profit up 20.6% to Rs 432.77 crore

FMCG major Godrej Consumer Products Ltd (GCPL) on Wednesday reported a 20.6 per cent increase in consolidated net profit to Rs 432.77 crore in the second quarter ended September, helped by double-digit volume growth and improved margins. The company had posted a net profit of Rs 358.86 crore in the July-September period last year, according to a regulatory filing.

Revenue and Sales Growth

Revenue from the sale of products of Godrej groups FMCG arm was up 6.06 per cent at Rs 3,568.36 crore during the second quarter of the current fiscal. In the year-ago period, the same stood at Rs 3,364.45 crore. The consolidated sales growth of 6 per cent is led by volume growth of 10 per cent, said an earnings statement from GPCL, which owns brands such as Good Knight, Cinthol and HIT. Similarly, its revenue from operations was also up 6.19 per cent in the September quarter to Rs 3,601.95 crore.

Expenses and Profit

GCPLs total expenses during the quarter under review rose 2.86 per cent to Rs 3,035.97 crore. The total income of GCPL in the September quarter stood at Rs 3,667.88 crore, up 6.87 per cent compared to the year-ago period.Sudhir Sitapati, Managing Director and CEO, said: "We delivered a steady performance in 2Q FY2024, despite the tough operating environment. Our consolidated volumes grew in double-digits at 10 per cent while sales grew by 6 per cent. Sales in constant currency terms grew by 16 per cent. Our quality of profits continues to improve consistently over the last few quarters with reported consolidated gross margin improving sharply by 700 bps year-on-year and 110 bps quarter-on-quarter, he added.

India Market

GCPLs India revenue rose 9.22 per cent to Rs 2,168.21 crore during the quarter from Rs 1,985.03 crore a year ago. This was led by volume growth of 11 per cent, said GCPL, adding that its net profit without exceptions and one-offs grew by 10 per cent to Rs 379 crore from the Indian market. In the home care segment, GCPLs performance in household insecticides was flattish due to poor monsoons, while its air fresheners continue to consistently deliver strong double-digit volume and value growth. However, its personal care declined by one per cent. While, its newly acquired brands Park Avenue and KamaSutra from Raymond witnessed a sharp improvement in their sequential sales run-rate, clocking a sales value of Rs 142 crore.

Other Markets

Revenue from GCPLs second biggest market Indonesia market was up 15.73 per cent to Rs 472.96 crore compared to Rs 408.66 crore in the year-ago period. The growth was aided by media investments, said GCPL. The business continues to scale up its GT distribution, drive renovation in the portfolio and seed access packs, it said. However, GCPLs revenue from the African market was down 5 per cent to Rs 815.80 crore as against Rs 858.66 crore a year ago. Our Africa, USA and Middle East cluster delivered a sales growth of 17 per cent in constant currency terms. Performance in INR terms was impacted by the devaluation of naira. FMCG categories continue to outperform, it said. Its revenue from other markets was at Rs 182.60 crore, up 4.70 per cent.

Outlook

Over the outlook, Sitapati said: "We continue to remain focused on driving volume-led growth along with healthy investments in our brands and improvement in profitability. We continue to have a strong balance sheet. We are on track in our journey to reduce wasted cost and are deploying this to drive profitable and sustainable volume growth across our portfolio through category development. Meanwhile, in a separate filing, GCPL said its board in a meeting held on Wednesday declared an interim dividend of 500 per cent, which is Rs 5 per share of Re 1. This would result in a payout of Rs 511 crore, it added. Shares of the company declined 1.68 per cent to close at Rs 975.90 on the BSE.