Godrej Consumer Products on Wednesday reported 23% increase in its net profit from a year ago in Q3FY16 to Rs 323 crore, in line with analysts expectations, driven by lower commodity prices and volume growth in domestic and international markets.
Consolidated nets sales grew 5.7% from a year ago to Rs 2,354 crore slightly below analysts expectation.
According to Bloomberg consensus, the company was expected to report profit of Rs 322 crore on sales of Rs 2,432 crore.
Consolidated earnings before interest taxes depreciation and amortisation (EBITDA) in 3Q FY 2016 increased by 19% from a year ago, driven by a 18% growth in India business and 20% growth in the international business during the quarter.
In the quarter, the domestic business which contributes more than half of the company’s revenue, grew 8%, led by 9% volume growth. GCPL, the second largest manufacturer of soaps and detergents in the country reported a 5% volume growth in the category and a 2% price-led growth. Gross margins during the quarter benefited from lower palm oil prices. Household insecticides from which GCPL gets 45% of its revenues grew 15% led by double-digit volume growth, the company said in a statement.
Adi Godrej, chairman, Godrej Group, said “Operating earnings growth was ahead of sales growth across most of our geographies, aided by lower commodity costs, price hikes, stringent cost management and the effective leveraging of brand platforms. Over the next few quarters, we will be introducing several new launches to stimulate demand and extend leadership in our core categories. We are also enhancing our infrastructure and investing strategically for the future. We expect our focus on innovation, distribution initiatives will aid growth. The medium and long-term growth prospects in India and other emerging markets remain robust.”
The company’s Africa business delivered 20% sales growth in the quarter compared to a year ago, Latin America sales rose 28% in the quarter compared to a year ago, led by strong performance in Argentina.
European business delivered sales growth of 10% in the quarter compared to a year ago period. European business delivered sales growth of 10% and Indonesia witnessed 3% sales growth in the quarter compared a to a year ago.
GCPL shares on Wednesday closed at Rs 1147.60 on Bombay Stock Exchange, down 0.23% from its previous close.