On the back of strong volume growth across core categories, Godrej Consumer Products on Wednesday reported a net profit of Rs 199.2 crore during the April-June quarter, up 38.9% beating analysts estimates. A Bloomberg poll had estimated profit at Rs 191 crore.
The home-grown FMCG player, however missed estimates on net sales, which during the period increased by 11% to Rs 2,095.1crore. The Bloomberg poll had estimated it at Rs 2,114 crore.
The company has seen an overall volume growth of 13%. The India branded business net sales increased by 13%, led by 13% volume growth and double-digit value growth across core categories.
“What has been encouraging for us is that we have seen double digit growth rate in rural and urban markets. In the urban market we have seen 10% growth and on the rural market we have 16% growth. In terms of geographies, during the quarter we have seen strong growth come from south and north than it has been in the east and the west,” said Vivek Gambhir, MD of Godrej Consumer Products.
“Margins can fluctuate every quarter, we will continue to gain the benefit of lower raw material prices and we have launched a series of cost reduction programmes last year. Overall our intent is to be able to deliver stronger profit growth than last year and see an expansion of margins in this year,” added Gambhir.
The FMCG major reported Ebitda at Rs 315.3 crore, an increase of 30.4% y-o-y Ebitda margins during the quarter stood at 17.6% compared to 15.66% in the same quarter last year.
GCPL expects commodity prices to remain on the lower side this year than it was in the previous fiscal.
Advertising and promotional spends during the June quarter were 12% of net sales while in the same period last year it stood at 13.2% of net sales and will continue to keep ad sales and promotion spends at similar levels going ahead. Consolidated organic constant currency Ebitda increased by 32% owing to a growth of 23% in the domestic business and 44% in the international business.
The company on Wednesday acquired the balance 40% stake in Cosmetica Nacional, a market leading Hair Colorant and Cosmetics company in Chile.
The GCPL scrip closed at Rs 1250.50, up 4.11% on BSE. The board also declared as dividend of Re 1 per share.