Godrej Consumer Q4FY18 PAT rises by 59% to Rs 617 crore; India, Indonesia businesses support growth

Godrej Consumer Product Limited (GCPL) witnessed mixed performance during fourth quarter ended March 2018 result, as it surpassed analysts estimate in terms of consolidated net income but failed to meet the expectations in regards to revenue. GCPL posted consolidated net profit of Rs 617.19 crore which was up by 59.24% compared to Rs 387.58 crore in the corresponding period of previous year. Q4FY18 net profit was also higher by 43.58% from Rs 429.87 crore of the preceding quarter. A Bloomberg poll of analysts expected consolidated earnings to come in at Rs 445 crore in Q4FY18. 

Consolidated revenue from operations were at Rs 2,528.89 crore, which was up by 1.58% from Rs 2,489.49 crore in Q4FY17 but down by 3.86% as against Rs 2,630.30 crore in Q3FY18. The Bloomberg poll of analysts expected the revenue to come in at Rs 2,621 crore this quarter. 

On geographical basis, India business contributed just 1.18% yoy growth in total consolidated revenue to Rs 1,369.76 crore in Q4FY18, whereas Indonesia business declined by 11.23% yoy to Rs 345.60 crore and Africe business was up by 5.60% yoy to Rs 516.57 crore. 

4QFY18 EBITDA Margin in India stood at 29.4%, international business at 17.9%, Indonesia at 26.8%, Africa, USA & ME at 12.2%, LATAM at 26.2% and Europe was at 12.4%. 

In India, brand volume growth was just 6% yoy. Segment that supported the performance in this market were soaps rising by 19% yoy, hair colours by 3% yoy and other brands by 34% yoy. It was household insecticides segment which recorded a decline of 5% yoy. 

Nisaba Godrej, Executive Chairperson, GCPL, said, "During fiscal year 2018, our focused strategy and balanced portfolio enabled us to deliver competitive, profitable growth, despite tough operating conditions in a few of our categories and geographies. Our constant currency sales increased by 9%* and EBITDA increased by 12%, led by robust gross margin expansion."

Godrej said, "In the fourth quarter of fiscal year 2018, we had a mixed performance with relatively softer sales growth, while sustaining robust EBITDA growth. "

Talking on geographical performance, Godrej explained, "Our India business delivered a competitive 7% comparable growth, driven by a volume growth of 6%. Our secondary sales growth was higher at 10%. The performance in our international portfolio was relatively muted due to the weakness in Indonesia and Africa."

Overall consolidated EBITDA of GCPL came in at Rs 605 crore rising by 11% compared to Rs 546 crore a year ago same period. EBITDA margins also surged by 150 basis points to 24.3% in Q4FY18 versus 22.7 in Q4FY17. 

Net profit margin of GCPL was at 24.7% in Q4FY18 up by 860 bps compared to 16.1% of Q4FY17. 

For year end FY18, consolidated PAT stood at Rs 1,634.18 crore growing by 24.94% in comparison with PAT of Rs 1,307.97 crore in previous fiscal FY17. Revenue stood at Rs 9,936.99 crore which also increased by 3.41% from Rs 9,608.8 crore in FY17. 

At the same time, standalone FY18 PAT was at Rs 999.87 crore soaring by 17.95% from Rs 847.72 crore in FY17. Also revenue grew by 5.22% to Rs 5,354.74 crore in FY18 versus revenue of Rs 5,088.99 crore in FY17.

Godrej said, "We expect to see a strong turnaround in growth rates in fiscal year 2019. We are planning for significant new launches and go-to-market initiatives across clusters. Overall, we are confident of delivering a stronger performance in fiscal year 2019."

The Board of Directors of the Company has declared an interim dividend @ Rs. 7/- per share (700% on the shares of the face value of Re. 1/- each) on Tuesday. The dividend will be paid on May 30, 2018.

Post result announcement, share price of GCPL was trading at Rs 1,125.50 per piece above Rs 25.35 or 2.30% on BSE.