Godrej Consumer Products expects double-digit sales growth backed by low single-digit volume growth in the domestic market for the quarter ended December.
The quarter saw softness in demand driven by poor rural consumption and a slowdown after the festive season, the company said in a regulatory filing. Nevertheless, the slow growth came on the back of double-digit sales growth in both home care and personal care, the company said.
Sequentially, there has been improvement from high single-digit sales growth and mid single-digit volume decline in the previous quarter.
The company’s Indonesia business, which contributes 12% to consolidated sales, has started to see gradual recovery, with constant currency sales decline in low single digits, the company said. In September quarter, the Indonesia business had seen sales drop by 8% on year and decline in profitability. Godrej Africa, USA, and Middle East clocked double-digit sales growth in constant currency terms.
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At a consolidated level, the company expects to deliver sales growth in mid-teens in constant currency terms and around double-digit in rupee terms with flattish volumes. The growth hassequentially improved from mid-to-high single digit sales growth and mid-single digit volume decline in the previous quarters.
The company also expects gross margin recovery and continued marketing investments translating to high single-digit Ebitda growth in December quarter.
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In September quarter, Godrej Consumer posted a 25% year-on-year decline in net profits at Rs 358.86 crore for the quarter ended September because of reduced volumes due to inflationary pressures and decline in profitability.
Revenue from operations grew 7% on year to Rs 3,391.92 crore driven by pricing growth as consolidated volumes declined 5% during the quarter.
On Thursday, company’s shares closed at Rs 917.35 on the BSE, up 3.24% from the previous day’s close.