GCPL sharpens focus on core, execution as new management takes charge

Godrej Consumer Products shifts focus to core brands and sharper execution as new CEO Aasif Malbari takes charge after Sudhir Sitapati's exit

With the new management at the helm of Godrej Consumer Products Ltd (GCPL), its strategy is to focus on the core and also sharpen its organisational structure, with execution being key to growth.

 

On its investor call on Tuesday, which the fast-moving consumer goods major called in the aftermath of its managing director and chief executive officer, Sudhir Sitapati, tendering his resignation on Monday, Aasif Malbari was elevated to the position of MD & CEO with immediate effect and Vishal Kedia was appointed interim chief financial officer.

 

GCPL’s executive chairperson, Nisaba Godrej, told investors on the call, “We've done a credible job navigating a genuinely hard five years for FMCG.”

 

She added that the company has put the right building blocks in place, but there is much more to be done to get from good to great.

 

“Our strategic direction is clear and strong. What we need is rigorous execution. Great to us is values and valuation, UVG and profit, core new categories, India and international, measured by decidedly outperforming the market,” she said in her opening remarks.

 

While answering investors’ questions, she said that the company wants to go back to the structure of having a global CEO and an India CEO. An announcement on the same, Godrej said, is expected over the next few months.

 

She also said that Malbari has delivered in Africa and the company wants that performance to be seen across the whole company.

 

Malbari, in his opening remarks on the call, stated that he and the team are committed to meeting the Godrej family’s and the board’s high expectations.

 

“…Elevating performance in our core while accelerating new category growth. We have iconic brands and significant category development opportunities ahead of us, and I'm very excited to get started in my new role. Let me start with our FY27 guidance. The guidance remains unchanged. High single-digit volume growth, double-digit revenue growth, double-digit profit growth,” he told investors.

 

He also said that focusing on the core brands in soaps, which include brands like Cinthol and Godrej No. 1, and liquid vaporisers, which it sells under the Goodknight brand, and getting them back to growth is non-negotiable.

 

“...But that doesn't mean that we are going to kind of support and double down on a new category creation at all. It is definitely a big and on both,” he said.

 

Malbari, while answering investors’ questions, said that on deodorants and perfumes, he would have gone via the organic route and, in pet care, he said he would have been a bit more entrepreneurial with a little less investment and incubated it and scaled up.

 

In 2023, GCPL entered the fragrance and deodorant market by acquiring Raymond Consumer Care for ₹2,825 crore. In 2024, it announced its entry into pet care with an investment of ₹500 crore over a period of five years.

 

In its report to investors, Nomura said on Sitapati stepping down, “The stepping down of Sudhir Sitapati as MD & CEO (resignation letter dated 10 Aug 26; appointed 18 Oct 21) came as a shock, after the board approved his reappointment for another five years on 7 May and the shareholders approved it in the AGM on 7 Aug 26. Under him, GCPL underwent a material transformation in its strategy, operations and team.”

 

The report added that there was a material step-up in innovation, foraying into categories of the future (deodorants/perfumes, liquid detergents, body wash, pet care, men's face wash, toilet cleaner, dishwash), new communication across its core products; dealer/retailer SKU (stock-keeping units) rationalisation — improving ROI (return on investment); new mega-factories — consolidating manufacturing, creating efficiency and material improvement in cash flow from operations.

 

“He not only attracted new strong talent / leadership across geographies and functions, but we believe he also attracted a lot of investor interest in the stock when he shared his roadmap and focus areas for GCPL,” the report added.

 

In a post on LinkedIn, Sitapati wrote, “After five extraordinary years, I am saying goodbye to GCPL. I leave with immense pride in what we have achieved together.”

 

He also said the company turned around market shares in its flagship household insecticides business after a decade.

 

“We returned Africa to profitability. We expanded our Air Care business globally. And we created new brands and businesses that I believe have the potential to become meaningful franchises — Fab, Spic, Good Knight Incense Sticks, Ninja, BLOQ and Cinthol Body Wash,” he added.

 

He also thanked Godrej for the opportunity to build something meaningful together.

 

Sitapati said he will be taking some time to unwind, reflect and spend time with his family before deciding what comes next.

 

Shriram Subramanian, founder and MD of InGovern Research Services, said that the question that needs to be asked is why Sitapati resigned after the annual general meeting, which took place on 7 August and where shareholders approved the appointment.

 

“This decision should have been taken ahead of the AGM and there should have been a transition period,” he added.

 

Sitapati was reappointed by the board of directors on 6 May, and the voting for his reappointment was open from 3 August.