Mumbai-based Godrej Consumer Products (GCPL) on Wednesday said it expected to deliver double-digit volume and value growth in the quarter ended March 31, for its India business, as consumer demand trends remained steady during the period. The disclosures were made as a part of its quarterly update for the fourth quarter.
GCPL derives around 57-58 % of its consolidated revenue from its India operations, according to sector analysts, with the rest coming from its international operations in markets such as Indonesia, Africa, the US and Middle East.
GCPL is the second consumer goods (FMCG) company after Marico, which on Monday said that FMCG volume trends were showing signs of improvement in India. Like Marico, GCPL also expected gross margins to recover in Q4 on the back of moderating raw material prices.
“The performance of our India business has exceeded expectations especially on the volume front. Our domestic branded business growth was very strong — registering volume and value growth in teens. This is in line with our strategy of volume-driven category development. Overall, the growth was broadbased and led by double-digit volume and value growth in both home-care and personal care,” GCPL said.
The Godrej group company also said that it saw double-digit earnings before interest, tax, depreciation and amortisation (Ebitda) growth in Q4, led by a gross margin recovery and overall improvement in profitability in Q4.
Rival Marico had indicated on Monday that while urban and premium categories were stable, easing of broader commodity inflation augured well for overall consumption trends in the FMCG market. It had said that gross margins were expected to expand and drive reasonable growth in operating profit for the March quarter.
While retail inflation in February eased to 6.44%, it has been above the Reserve Bank of India’s upper tolerance band of 2% to 6 % for months. Commodity inflation has hurt rural FMCG demand over the last few quarters, which Marico says would improve over the coming months based on a variety of improving macro indicators.
On the international front, GCPL said that its Indonesia business had started to see gradual recovery in performance. While Godrej Africa, US and Middle East (GAUM) had witnessed a temporary pause in its double-digit sales growth momentum in Q4, clocking higher than mid-single digit sales growth in constant currency terms.