Godrej Consumer Products Q3 Results: Profit drops 14% YoY to ₹498 crore; rising RM costs affect margins | Stock Market News

Godrej Consumer Products, a leading FMCG company, announced its financial results for the quarter ending December 31, 2024, on January 24, reporting a 14.28% year-on-year (YoY) decline in consolidated net profit, which reached ₹498 crore, impacted by soft performance in both the Home and Personal Care segments.

In the same period last year, the company posted a net profit of ₹581 crore, and in the preceding September quarter, it reported a profit of ₹491.31 crore.

Its total revenue grew marginally by 3% YoY and 2% quarter-on-quarter (QoQ), reaching ₹3,749 crore. Home Care revenues stood at ₹1,095 crore, marking a 4% YoY increase, while Personal Care posted revenues of ₹1,044 crore, reflecting a 2% YoY growth.

The company’s revenue from the Indonesia region grew by 9% YoY to ₹508 crore. However, revenue from Africa, the USA, and the Middle East declined by 8% YoY and 1% QoQ, totalling ₹771 crore. Conversely, Latin America and other regions experienced strong revenue growth, with revenue at ₹262 crore, reflecting a 165% YoY and 28% QoQ increase.

The company’s margins were impacted by rising raw material prices, while weakness in urban consumption led to sluggish volume growth. The surge in palm oil costs negatively impacted its EBITDA margin, which stood at 22.6%, lower than its typical margin. For comparison, the company posted an EBITDA margin of 29% in Q3FY24.

Personal wash volumes declined by mid-to-high single digits during the quarter, but this was nearly offset by corresponding pricing growth. The company continues to face significant cost pressures due to inflation in palm derivatives and has implemented substantial price hikes across its product portfolio.

As previously communicated by the company, this will lead to reduced UVG and increased UPG, with margin pressure expected to persist for the next few months.

Meanwhile, the company declared an interim dividend of ₹5 per share (500% on equity shares with a face value of ₹1 each) for the financial year 2024-25. 

Volume growth challenges

Commenting on the business performance of Q3 FY 2025, Sudhir Sitapati, Managing Director and CEO, GCPL, said, “Demand conditions in India have witnessed temporary headwinds over the past few months, led by a slowdown in urban consumption. A surge in palm oil prices of more than 40% along with weak seasonality in household insecticides has led to a flat underlying volume growth and mid-single-digit underlying sales growth for our standalone business.”

Premium formats in household insecticides were impacted due to urban slowdown and category seasonality; however, we have started to gain market share within premium formats, which suggests that the RNF molecule is working amongst consumers.

“We remain focused on driving volume-led growth along with healthy investments in our brands and improvement in profitability. We continue to have a strong balance sheet. We are on track in our journey to reduce wasted cost and are deploying this to drive profitable and sustainable volume growth across our portfolio through category development,” Sudhir added.

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