Godrej Consumer Products sees Q3 sales rise on personal, home care demand

The company expects sales on a constant currency basis to increase in the mid-teens percentage range for the third quarter, with overall profit seeing "meaningful improvement," as gross margins expand

India's Godrej Consumer Products on Thursday forecast higher third-quarter sales growth and profit margins due to strong demand for its home and personal care products and a let-up in input costs.

The maker of Cinthol soaps and Goodknight mosquito repellents expects sales on a constant currency basis to increase in the mid-teens percentage range for the third quarter, with overall profit seeing "meaningful improvement," as gross margins expand.

Shares climbed 2.6% in early trading as the forecast came in above the mid-to-high single digit sales growth it had reported in previous quarters.

However, rural demand in the country was muted in the third quarter, Godrej said. The company has not yet said when it will report third-quarter results.

Parachute hair oil maker Marico on Wednesday pointed to a muted recovery in rural consumption as well, even as demand for its higher-end products from urban customers held steady.

Godrej, which also sells Stella air freshener and Wetties antiseptic wipes in Indonesia, said its business in the country had begun gradually recovering, with sales decline narrowing to low-single-digit percentage range from a 11% drop in the previous quarter.

Roughly 14% of its overall revenue in fiscal 2022 came from Indonesia, where it had struggled over the last few quarters due to macroeconomic challenges, stubbornly high inflation and intense competition.

(Reporting by Praveen Paramasivam in Chennai; Editing by Nivedita Bhattacharjee)