Godrej Consumer Products (GCPL) reported a 3.6% on year rise in net profits for the quarter ended December to Rs 546.34 crore on the back of improved sales and volumes. The company’s net profit for the quarter beat analysts’ estimates of Rs 504.50 crore. However, net sales missed estimates of Rs 3,635.40 crore.
Revenue from operations stood at Rs 3,598.92 crore during October-December, up 9% as consolidated volumes improved 1% on year. Consolidated operating margin also improved 20 basis points y-o-y to 21.5% as commodity pressures abated.
Of consolidated operations, India sales, which contribute around 55%, improved 11% on year with a volume growth of 3%. Indonesia business, which contributes around 12% to the company’s consolidated sales, declined 3% in constant currency.
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Commenting on Q3 performance, Sudhir Sitapati, MD and CEO, GCPL, said, “With commodity pressures abating, we expect gradual recovery in consumption, expansion in gross margins, upfront marketing investments with a significant focus on reducing controllable costs and improvement in profitability in the coming quarters.”
Total expenses were also up 9.4% on year to Rs 2,969.52 primarily because of increase in advertisement spend and other expenses.
In India, the double-digit sales growth was led by home care and personal care. Ebitda margins in India stood at 27.3%, up 210 bps y-o-y. The company also increased its working media investment by 28%, up 250 bps year-on-year, the company said.
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In international business in Indonesia, sales declined by 3% in constant currency. Ebitda margins stood at 20.1%, decreased 100 bps y-o-y due to upfront higher marketing investments and scale deleverage. The company continues to put building blocks in place to drive category development and general trade distribution expansion, it said.
While Africa, the US and West Asia sales grew 23% in constant currency terms y-o-y, Latin America and SAARC sales grew 47% in constant currency terms y-o-y.