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Godrej Consumer Products expects improved consumption in the second half of this fiscal year

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Godrej Consumer Products Ltd (GCPL) expects consumption to improve in the second half of the current fiscal year, mainly due to the moderation in inflationary pressures amid corrections in commodity prices.



The company’s forecast also comes against the backdrop of the FMCG industry remain soft amid slower growth in rural markets.

“We expect mid-single digit volume decline, with low single digit volume CAGR over three years. Personal Care maintained its strong double digit growth trajectory, while Home Care showed near mid single digit growth,” the report said. the company said in its quarterly update for the three months ending September.

In terms of value, GCPL expects to “achieve high single-digit revenue growth”.

In terms of profitability at a consolidated level, the Godrej group company expects a “mid-teens EBITDA decline”. EBITDA refers to Earnings Before Interest, Tax, Depreciation and Amortisation.

“This is due to the consumption of expensive materials, significant initial marketing investment to drive category development and a weak performance in Indonesia,” it said.

However, with a significant correction in the prices of commodities such as palm oil derivatives and crude oil, GCPL expects a recovery in consumption, gross margin growth and upfront marketing investment in the coming quarters.

On the Indian FMCG industry, GCPL said it remained weak throughout the quarter and rural markets showed slower growth compared to urban markets.

“However, with the moderation in inflationary pressures due to the commodity price correction and monsoons largely on track (apart from a few states), we expect consumption to improve in the second half of the year,” the statement said. report.

GCPL’s key brands include Good Knight, Hit, Cinthol and Protekt in the domestic FMCG market. It is present in segments such as Household Insecticides, Hair Coloring, Air Care, Textile Care and Personal Wash and Hygiene.

In Indonesia, a key market for GCPL after India, it expects “an early double-digit decline in sales in constant currency”.

“In Godrej, Africa, US and Middle East (GAUM), we have continued our growth momentum in key countries. We expect constant growth in currency sales in the low teens. We expect constant growth in currency sales in the years thirty in our Latin America business,” the quarterly update said.

At a consolidated level, GCPL continues to leverage its category and geographic portfolio.

“We expect to achieve above-average single digit sales growth at a CAGR of nearly two digits over three years. We expect sales growth to be close to double digits excluding the Indonesian hygiene comparator,” it said.

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