Godrej Consumer expects stable demand, sees El Nino as potential challenge

The FMCG major expects high-single-digit volume growth and revenue growth in the teens, while commodity prices at current levels should limit further price increases

Godrej Consumer Products expects demand to remain stable, but challenges could arise from El Niño, which could affect farm incomes.

 

“As we look a little bit ahead, there could be some challenges in terms of El Nino that could impact agri and farm incomes, but I'm hoping that increased government spends etc., they should kind of offset each other,” Aasif Malbari, chief financial officer at Godrej Consumer Products, told Business Standard.

 

He added that the company might lose some of the currency gains seen in the April-June quarter. However, the fast-moving consumer goods (FMCG) major expects to maintain volume growth in the high single digits and revenue growth in the teens.

 

 

On price increases, Malbari said that a large portion of the increases had already been passed on and that he did not expect material changes in pricing as long as commodities remained at current levels.

 

For Godrej Consumer Products' Africa, Middle East and US (GUAM) markets, he said, “We are now building in new categories, and it's a large multi-decade opportunity in terms of building in categories, we definitely see this business performing at elevated levels going forward.”

 

In the Indian market, too, the company is expanding its fast-moving categories, and their salience has increased from 15 per cent last year to 17 per cent, Malbari said. He added that this would continue to rise sequentially as Godrej Consumer Products added more products in the new categories.

 

During the July-September quarter, the company is entering the dishwashing-liquid segment with Godrej Rizz and launching it in select markets.

 

In the April-June quarter, the company’s consolidated net profit rose 11.5 per cent to ₹504.5 crore.

 

The maker of Cinthol soaps recorded volume growth of 9 per cent in the quarter, while revenue rose 18.3 per cent to ₹4,225.5 crore.