Godrej Consumer Products (GCPL) on Thursday reported flat June-quarter (Q1FY26) profit, amid higher raw material costs, notably palm oil, and challenges in the Indonesian business. Revenue growth was robust driven by rural and urban markets in the India business. GCPL derives roughly 65-70% of its business from India; the rest comes from international markets. India operations includes household insecticides, soaps, hair colorants, air fresheners, and liquid detergents.
“We see FMCG consumption improving in FY26 versus FY25 on the back of favourable macro-economic fundamentals and a good monsoon season in India,” Aasif Malbari, global CFO and president for Middle East, Africa and International Markets, GCPL, said. “We see the rural growth engine getting stronger and urban demand recovering with the fiscal and monetary policy measures,” Malbari said.
Revenue, Flat Profit, and Margin Squeeze
The company posted consolidated net profit of Rs 452 crore in the June quarter, missing street estimates of Rs 500 crore for the period. Q1 had an exceptional item in the consolidated financial results including an amount of Rs 19.54 crore related to litigation settlement in Indonesia, the company said.
Revenue was up 9.9% to Rs 3,662 crore in Q1 versus Rs 3,332 crore reported last year, and in line with Bloomberg consensus estimates of Rs 3,630 crore for the period. Earnings before interest tax depreciation and amortisation (Ebitda) was down 4.1% year-on-year to Rs 695 crore, below street estimates of Rs 750 crore for the period. Ebitda margin at 19% was down 270 basis points versus 21.7% reported last year.
India’s Growth vs. International Challenges
The board has declared an interim dividend at the rate of Rs 5 per share of the face value of Re 1 each, GCPL said.
GCPL managing director and CEO Sudhir Sitapati said the India business had a good quarter, delivering revenue growth of 8% and volume growth of 5%. Soaps volume growth was impacted by volume-price rebalancing as the business was adjusting to volatile price movements in palm oil.
“Our international business has been impacted due to macro headwinds and competitive pricing pressures in Indonesia, which was compensated by strong performance in Africa,”Sitapati said.
On the outlook, Sitapati said, that the company expected performance to improve sequentially in FY26. The second half performance is expected to be better than H1.
While palm oil prices started moderating towards the end of June, benefits of this moderation would be realised in the second half of the year, he said.