Godrej Consumer Products is expected to report another quarter of steady growth, with analysts highlighting strong demand across India and key international markets, despite rising raw material costs.
Godrej Consumer Products is expected to post another quarter of steady growth when it reports results on Friday, with analysts looking for strong demand in both India and overseas markets to help offset pressure from higher raw material costs.
Zee Business said revenue for the June quarter is likely to have climbed 14.6% year on year to Rs 4,196 crore, while net profit may have risen 17.5% to Rs 531 crore. The brokerage estimates suggest earnings before interest, tax, depreciation and amortisation, or EBITDA, advanced 13.7% to Rs 790 crore, although the margin may have eased slightly to 18.8% from 19% a year earlier as commodity inflation filtered through.
Domestic operations are expected to remain the main driver. Market estimates point to about 8% volume growth in India, with home care likely to expand by around 12% and personal care rising 4% to 7%. Lower advertising and promotional spending could offer some support to profitability, but that benefit may be partly offset by cost pressure on inputs. LiveMint and Business Standard both reported that the company has been anticipating high-teens revenue growth for the quarter, supported by strong underlying volumes.
Overseas, the picture also appears encouraging. Analysts expect international revenue to rise about 15% in rupee terms, helped by easing competition in Indonesia and continued strength in the GAUM business, which covers Africa, the US and the Middle East. Business Standard reported that Indonesia has shown a clearer recovery, while GAUM has delivered growth in the teens. Godrej Consumer has also said it expects to manage raw material volatility through sourcing changes, pricing actions and tighter planning, with investors likely to focus on management commentary about margin trends, commodity costs and demand in urban and rural markets.
The company ended the previous financial year on a firm footing. In the March quarter, it reported higher revenue, profit and EBITDA, and said pricing pressure in Indonesia had largely bottomed out. That backdrop has left the market watching whether the June quarter confirms that the recovery is broadening and whether margins can improve later in the year as input costs stabilise.
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