Godrej Consumer Q3 profit rises 5% to Rs 445 crore, sales see marginal growth

Homegrown consumer goods company Godrej Consumer Products (GCPL) on Wednesday reported 5.1 per cent year-on-year (YoY) growth in consolidated net profit at Rs 445.20 crore for the third quarter ended December 31, 2019. The FMCG major had posted a net profit of Rs 423.5 crore in the corresponding period last fiscal, and Rs 413.88 crore during September quarter of this fiscal.

Net sales of the company increased marginally by 1 per cent to Rs 1,492 crore compared to Rs 1,472 crore reported in the year-ago period, led by new product launches, effective marketing campaigns and consumer offers.

India business sales grew 1 per cent YoY, while it delivered a volume growth of 7 per cent on yearly basis. International business sales grew 11 per cent YoY, on a constant currency basis, led by 9 per cent rise in Indonesia business.

"We delivered a steady performance in the third quarter of fiscal year 2020. Our India business delivered a robust volume growth of 7 per cent alongside gaining market shares across major categories, amid further deterioration in staples consumption. We expect a gradual recovery in the coming quarters for the FMCG industry and also for our business," said Nisaba Godrej, Executive Chairperson, GCPL.

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"Going ahead, we expect steady volume growth in India, supported by our continued focus on innovations and enhancements to our go-to-market model. We will continue to drive profitable sales growth in Indonesia, while focusing on profitability in Africa, and ensuring a meaningful turnaround in our Latin American business," Nisaba added.

In Q3 FY20, Earnings before Interest, Tax, Depreciation and Amortisation (EBITDA) rose 3.6 per cent YoY to Rs 630.6 crore, while EBITDA margin expanded by 40 basis points to 22.7 per cent.

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Segment-wise, household insecticides business, including Goodknight and incense sticks, reported a 3 per cent value growth. "The initial response to the recently launched Goodknight Gold Flash Liquid Vapouriser in South India has been encouraging, and we plan to scale it nationally in Q4 FY20," the company said.

While soaps delivered a sales decline of 4 per cent, dented by price offs and consumer offers, hair colours saw a soft performance amid "general slowdown in the category due its discretionary nature and consumers stretching their consumption".

The company's board of directors has also declared interim dividend at Rs 2 per share (200 per cent on shares of face value of Rs 1 each) for the financial year 2019-20.The dividend will be paid on February 18, 2020.

Following Q3 results, shares of Godrej Consumer Products closed Wednesday's trade at Rs 742.10 apiece, up 0.87 per cent, on the BSE.

By Chitranjan Kumar