On Friday, Godrej Consumer Products issued a quarterly update, affirming that the volume growth in India for the quarter ending on December 31, 2023, remains in the double digits. The FMCG giant also emphasized that the operating conditions persistently mirror those of the second quarter.
“Despite this, our organic business delivered steady underlying volume growth of mid-single digit. Growth was broad-based across both Home Care and Personal Care,” said Godrej in an exchange filing.
According to the company, the recently acquired brands, Park Avenue and KamaSutra, under Raymond Consumer Care, are demonstrating strong performance and are on course to meet the full-year goals.
It’s worth mentioning that the brands mentioned above recorded sales amounting to INR 142 crore in the preceding quarter.
Although the Indonesia operations achieved nearly double-digit volume growth and high-single digit constant currency sales growth, the Godrej Africa, USA, and Middle East business experienced either stable or slightly declining volume growth.
“This was driven by trade destocking in geographies that we plan to restructure in Q4. Although it sustained double-digit constant currency sales growth, the impact of the Naira devaluation will result in high-single digit sales decline,” the consumer goods giant explained.
Additionally, due to a significant devaluation of the Argentinian Peso from 361 to 808 and hyperinflation in Latin America (LATAM), the business of Godrej Consumer in this region has been significantly affected, impacting nine months of revenue.
“This is likely to have a negative impact of mid-single digit on the consolidated sales. However, the impact on profit is minimal. Despite the challenging environment, the LATAM business continues to deliver positive volume growth,” the company said.
Godrej Consumer Products Anticipated Growth:
Nevertheless, the Mumbai-based company remains optimistic about achieving reported volume growth, anticipated to be in the high-single digits at the consolidated level. Simultaneously, it foresees reported sales growth to remain relatively stable in INR terms.
“At a Consolidated level (organic), we expect to deliver mid-single digit volume growth, double-digit constant currency sales growth but low-single digit sales decline in INR terms due to GAUM and LATAM currency and hyperinflation accounting impact,” Godrej Consumer added.
Despite significantly higher category development investments, the company continues to drive year-on-year expansion in EBITDA (incl. Forex) margin.
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