Godrej Consumer Products, one of India’s leading FMCG companies, has reported double-digit volume growth in the December quarter. This growth was broad-based across both Home Care and Personal Care segments. Godrej Consumer’s reported volume growth in India continued to be in double digits for the quarter ended December 31, 2023. The company’s recently acquired brands, Park Avenue and KamaSutra, performed well and are on track to achieve their full-year targets. These brands registered sales of Rs 142 crore in the previous quarter.
Godrej Consumer’s Indonesia business delivered close to double-digit volume growth and high-single-digit constant currency sales growth. However, the Godrej Africa, USA, and Middle East business experienced flattish to mild decline in volume growth due to trade destocking in geographies that are planned for restructuring in Q4. The impact of the Naira devaluation is expected to result in high-single-digit sales decline. In Latin America (LATAM), the sharp devaluation of the Argentinian Peso and hyperinflation have severely impacted Godrej Consumer’s business, affecting nine months of revenue. Despite these challenges, the LATAM business continues to deliver positive volume growth.
The company remains confident in delivering mid-single-digit volume growth and double-digit constant currency sales growth at the consolidated level. Despite higher category development investments, Godrej Consumer continues to drive year-on-year expansion in EBITDA (incl. Forex) margin.
RTM Watch’s Take
Godrej Consumer’s reported double-digit volume growth in the December quarter reflects the company’s resilience in a challenging market environment. The steady performance in India, along with the success of the recently acquired brands, demonstrates the company’s ability to adapt and grow. However, the impact of currency devaluation and hyperinflation in certain regions poses challenges for Godrej Consumer’s consolidated sales growth. Nevertheless, the company’s focus on driving volume growth and expanding EBITDA margin is commendable.
