Godrej Consumer Products Q1 net profit down 7.6% to 318.8 crore

FMCG major Godrej Consumer Products Ltd on Monday reported a 7.62 per cent decline in consolidated net profit to Rs 318.82 crore in the June quarter due to expenses incurred on exceptional items.

The company, which had posted a net profit of Rs 345.12 crore in the April-June period last year, said its board on Monday approved a capital expenditure of Rs 900 crore for setting up new manufacturing sites in Tamil Nadu and Madya Pradesh.

However, revenue from the sale of products of Godrej group's FMCG arm was up 10.45 per cent at Rs 3,417.86 crore during the first quarter of the current fiscal against Rs 3,094.31 crore a year ago, Godrej Consumer Products Ltd (GCPL) said in a BSE filing.

"Consolidated sales grew 10 per cent, led by a 10 per cent growth in volume and constant currency growth of 15 per cent year-on-year," GCPL said in its earning statement.

The company reported a decline in net profit in the June quarter because of the expenses on exceptional items of Rs 81.78 crore comprising Rs 77.52 crore on account of the acquisition of Raymond Consumer Care Business and Rs 4.26 crore on account of other restructuring costs.

"Consolidated net profit grew 19 per cent year-on-year (without exceptional items and oneoffs)," it said.

GCPL's total expenses during the quarter were up 9.64 per cent to Rs 2,956.36 crore, while its revenues were Rs 3,518.02 crore, up 11.6 per cent.

GCPL's India revenue rose 8.43 per cent to Rs 2,005.48 crore during the quarter from Rs 1,849.41 crore a year ago.

This was led by of 12 per cent volume growth in its India business, GCPL said.

Its home care segment, consisting of household insecticides and air fresheners, grew 14 per cent, while the personal care vertical, having hair colour and personal wash categories, rose 2 per cent.

Revenue from the Indonesian market was up 19.7 per cent to Rs 450.69 crore compared to Rs 376.51 crore in the year-ago period.

"Sales grew 15 per cent in constant currency terms on the back of structural initiatives taken last year. Our EBITDA margins were at 19.5 per cent, up 420 bps year-on-year, led by reduction in trade promotions and scale leverage," said GCPL.

GCPL's revenue from the Africa market was up 8.94 per cent to Rs 848.57 crore as against Rs 778.87 crore a year ago.

"Our Africa, US and Middle East cluster delivered sales growth of 16 per cent in constant currency terms. We continue to deliver healthy double-digit sales growth in the FMCG category. EBITDA margins at 11.8 per cent expanded by 350 bps year-on-year," it said.

While revenue from other markets was up 17.35 per cent to Rs 180.79 crore in the first quarter as against Rs 154.05 crore a year ago.

"We started the year on a positive note and achieved healthy volume-led sales growth. In organic terms, our consolidated sales increased by 9 per cent year-on-year, driven by healthy volume growth of 8 per cent. Sales in constant currency terms increased by 13 per cent," GCPL Managing Director Sudhir Sitapati said.

The company remains focused on driving volume-led growth, along with healthy investments in its brands and improvement in profitability, he said.

"We continue to have a strong balance sheet. We are on track to reduce wasted cost and... Drive profitable and sustainable volume growth across our portfolio through category development," said Sitapati.

Shares of Godrej Consumer Products Ltd on Monday settled at Rs 1,030.50 on BSE, up 1.35 per cent from the previous close.