Sudhir Sitapati, the Managing Director and CEO of Godrej Consumer Products Ltd (GCPL), sounded cautiously optimistic on Wednesday as he laid out his expectations for a recovery in consumer demand over the next year to year-and-a-half.

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Speaking after the company’s earnings announcement, Sitapati pointed to a few encouraging signs on the horizon—cooling food inflation, forecasts of a normal monsoon, and the potential boost from the upcoming pay commission—as factors that could lift consumption, especially in the fast-moving consumer goods (FMCG) sector.

“The last couple of years have been slightly off-track,” he admitted. “FMCG volume growth typically runs ahead of GDP. So, if GDP is growing at 6%, we should ideally be seeing volume growth of around 7% to 7.5%. Instead, it’s been around 4%. But I don’t think this is a permanent shift. I expect a bounce-back.”

Palm oil—an essential ingredient in GCPL’s soaps—is another pressure point. Prices have been high, squeezing margins, but Sitapati believes the worst may be over. “We’ve only passed on about 15 to 16 percent of the cost increase to consumers so far. The rest, we’ve absorbed,” he said, adding that profitability could rise again once palm oil rates ease.

Despite the macroeconomic headwinds, GCPL has posted steady numbers. For the March quarter, it reported a consolidated net profit of Rs 411.9 crore, with a 6% volume growth. Over the full fiscal year ending March 2025, net profit reached Rs 1,852.3 crore, while revenue stood at Rs 14,364.29 crore, reflecting a modest 1.9% uptick.

Looking ahead, the company plans to double down on categories with room to grow—hair color, body wash, and sexual wellness. These are areas where penetration is still relatively low, offering a long growth runway.

One segment that has been particularly resilient is household insecticides, with brands like Goodknight and HITS posting double-digit volume growth.

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Sitapati also noted how external factors like the El Niño weather phenomenon had pushed up food prices last year, which quickly fed into consumer behavior. “When food inflation rises, people cut back. But now with the El Niño behind us and prices stabilizing in early 2025, we’re hoping that wallets will start to open again,” he said.

With a mix of strategic bets and macro-level shifts working in its favor, GCPL is hoping the worst is behind—and that better days are just around the corner.