Godrej Consumer Products (GCPL) on Monday informed the stock exchanges that it expects volume growth to remain marginally higher than mid-single digit in the local market in the October-December quarter. Despite weak demand in India, it has managed to grow its business, GCPL said.
Highlighting the overall challenges it has faced in recent months, GCPL further said, “During the quarter, we witnessed relatively mixed demand across some of our geographies of operations. In India, demand continued to be challenging, impacted by a general consumption slowdown.”
However, the uptick in volume growth was led by gradual recovery in the household insecticides business and new product launches. Effective marketing campaigns and tactical consumer offers further aided kit sales.
While GCPL did not specify its sales value growth, it said the number may mirror the trend of the past few quarters’ sales value growth.
In the past three quarters, sales growth rates in India ranged between 0.9 and 1 per cent year-on-year (YoY).
According to Edelweiss Securities’ estimates, GCPL is set to clock 6 to 6.5 per cent YoY volume growth. Edelweiss said this could be the second highest domestic volume growth in the October-December quarter after Nestlé’s.
Despite continuing slowdown, GCPL said it “looked forward to a gradual improvement in consumer demand in the quarters ahead, driven by good monsoon and the government’s stimuli.”
GCPL’s statements come a week after its peer Marico’s chairman Harsh Mariwala voiced his concerns over slowing growth in the consumer market. The slowdown in consumption is a major factor behind GDP growth falling to a six-year low, he said.
In other key markets like Indonesia, GCPL recorded close to high single digit constant currency sales growth, amid an improving demand environment in the home and personal care space.
The growths are driven by product launches and expansion of general trade distribution, it said.
In regions like Africa, the US and West Asia, it witnessed recovery with higher than mid-single digit constant currency sales growth, reversing the trend of the past few quarters.
“The performance was driven by improved show in South Africa and the rest of Africa and Middle East cluster. We continue to drive scale in the wet hair care category. Relaunch of the Darling brand in the dry hair segment along with expansion in distribution will deliver sales growth for the year,” it said.
GCPL gets nearly 45 per cent of its Rs 10,300 crore yearly sales from the overseas markets.