Godrej Consumer declines after flat Q4 performance

Godrej Consumer Products (GCPL) tumbled 4.15% to Rs 795.30 after the company reported a consolidated net profit of Rs 363.24 crore in Q4 FY22, which is lower by 0.7% as compared with Rs 365.84 crore recorded in Q4 FY21.

Revenue from operations rose 7% to Rs 2,894.15 crore in Q4FY22 over Q4FY21.

During the quarter, the India business sales grew by 9% YoY but volume declined by 3%. The Home Care segment declined by 2% while the Home Care saw a de-growth of 7% in Q4 FY22, while the Personal Care segment grew by 18% in the same period.

EBITDA margins in India at 23.6%; expanded by 100 bps YoY, while gross margins declined by approximately 410 bps (due to higher commodity inflation). However, the trend is improving as the YoY drop is lower sequentially, GCPL stated.

The company said that while the performance in Home Care and Personal Care segments was mixed, it gained market share in approximately 85% of their categories. The company further added that it continues to strengthen its e-commerce business, with approximately 6% of its branded sales happening on those channels.

Meanwhile, Indonesia sales declined by 16% YoY in constant currency terms. Africa, USA and Middle East sales grew by 14% YoY in constant currency terms. Latin America & SAARC sales grew by 26% YoY in constant currency terms.

GCPL said that consolidated EBITDA margins at 18.1% (down 320 bps YoY), due to higher commodity inflation and weak performance in Indonesia

The company reported 3.5% rise in consolidated net profit to Rs 1,783.39 on a 11.3% increase in revenues from operations to Rs 12,174 crore in FY22 over FY21.

Sudhir Sitapati, managing director and CEO, GCPL, said: We delivered a weak performance in 4Q FY 2022. Overall sales grew by 7% and our full yearsales grew in double-digits. However, this growth was driven by pricing. We continue to believe that with the relatively non-discretionary, mass pricing of our portfolio and very good performance on market shares, volume growth will return in the medium term.

Our overall EBITDA declined by 9% (without one-offs) driven by unprecedented global commodity inflation and scale deleverage in Indonesia. PAT without exceptional items and one-offs declined by 4%

We continue to have a healthy balance sheet and our net debt to equity ratio continues to come down."

Godrej Consumer Products is an Indian consumer goods company. The company's products include soap, hair colorants, toiletries and liquid detergents.

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