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Godrej Consumer Products advances after Q2 earnings

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Godrej Consumer Products rose 2.29% to Rs 738.40 after consolidated net profit fell 28.36% to Rs 413.88 crore on 1.32% decline in net sales to Rs 2,608.15 crore in Q2 September 2019 over Q2 September 2018.

The announcement was made during market hours today, 6 November 2019.

The company posted a one-time gain of Rs 259.72 crore in the second quarter last financial year due to the divestment of its UK business during the period. Excluding exceptional and one-off items, net profit grew 11% year-on-year to Rs 384 crore in Q2 September 2019.

The company's India sales grew 1% year-on-year to Rs 1,521 crore during the reporting quarter. International business grew 7% year-on-year in constant currency terms, the company said.

Commenting on the financial performance of Q2, Nisaba Godrej, Executive Chairperson, GCPL, said: "In our international businesses, Indonesia continued its strong performance with double digit profitable sales growth driven by a consistent performance across categories and several go- to-market initiatives."

"In fiscal year 2020 we expect steady volume growth in India, supported by our continued focus on innovations and enhancements to our go-to-market model. We will continue to drive profitable sales growth in Indonesia, while focusing on profitability in Africa, and ensuring a meaningful turnaround in our Latin American business."

During the period ended 30 September 2019, there has been sale of certain brands within its entities that will derive benefits of future tax deductions for the group. Consequently, a deferred tax asset amounting to Rs 111.05 crore has been recognised in the consolidated financial results, the company said.

The company has evaluated the option of lower tax rates allowed under Section 115BAA of the Income Tax Act, 1961 as Introduced by the Taxation Laws (Amendment) Ordinance, 2019. Accordingly, considering the MAT credit available, there is no Impact on the provision for income tax for the quarter and six months ended 30 September 2019. The company expects to utilise the deferred tax balances over subsequent periods which have accordingly been re-measured using the tax rate expected to be prevalent in the period in which the deferred tax balances are expected to reverse. Consequently, the company has reversed deferred tax liabilities amounting to Rs 33.26 crore in the current period financial results at the estimated annual effective tax rate.

Godrej Consumer Products is engaged in the manufacture of personal and household care products. The firm's geographic segments include India as well as overseas. It offers hair care products.

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(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Wed, November 06 2019. 12:52 IST