Consumer demand steady in Q1, organic business delivering double-digit volume growth: Godrej Consumer

Consumer demand in the domestic market remained 'steady' in the April-June quarter and the company expects 'robust performance with double-digit volume growth" in the organic business, Godrej Consumer Products Ltd said on Wednesday.

The performance was broad-based with double-digit volume growth in home care and higher than mid-single-digit volume growth in personal care, the Godrej Group's FMCG arm said in its quarterly update for Q1 FY24.

"Sales growth was marginally higher than mid-single digit, as we passed on the benefits of lower input costs to our consumers," said GCPL. Its sales growth including inorganic business, during the April-June quarter, was in the high-single digits.

"In India, overall Consumer demand remained steady as seen in the previous few quarters. Our organic business continued to deliver robust performance with double-digit volume growth," said GCPL's updates.

In international markets, GCPL's Indonesia business delivered steady performance on the back of structural changes implemented last year. On constant currency, sales are expected to grow in the mid-teens in Indonesia -- GCPL's second-biggest market after India.

"Godrej Africa, USA, and Middle East (GAUM) continued to deliver consistent performance with constant currency sales growth in mid-teens," it said.
However, in rupee terms, there was an adverse currency translation impact resulting in high single-digit sales growth.

"At a consolidated level (organic), we expect to deliver high-single-digit volume growth, teens growth in constant currency terms translating to close to double-digit sales growth in INR terms. Sales growth (including inorganic) to be in double-digits," it said.

GCPL further said its profits have seen sustained improvement, led by "robust gross margin expansion and ongoing category development" investments.
"This should translate to strong EBITDA growth," it said.

Moreover, GCPL which had bought the FMCG business of Sighnia's Raymond Consumer Care (RCCL), a player in the deodorants and sexual wellness categories in India, along with brand Park Avenue in a Rs 2,825-crore deal in the last quarter, expect exceptional expenses on the transaction.

"We expect to have an exceptional stamp duty expense on slump-sale transactions of Park Avenue and KamaSutra brand acquisition," it said.

According to GCPL, this quarterly update provides an overall summary of the operating performance and demand trends during the quarter ended June 30, 2023.

"This will be followed by a detailed performance update, post the approval of the 1Q FY24 financial results by the board of directors," it added.