Godrej Consumer Q1 net profit down 17% at Rs 345 cr; revenue up 8%

FMCG major Godrej Consumer Products Ltd (GCPL) on Wednesday reported a 16.56 per cent decline in its consolidated net profit at Rs 345.12 crore for the first quarter ended June 30, 2022, on account of commodity inflation and upfront marketing investments.

It had posted a net profit of Rs 413.66 crore in the April-June quarter a year ago, GCPL said in a regulatory filing.

The revenue from the sale of products of the Godrej group's FMCG arm was up 8.08 per cent at Rs 3,094.31 crore during the quarter under review, as against Rs 2,862.83 crore in the corresponding period last fiscal.

GCPL's total expenses were at Rs 2,696.29 crore in Q1/FY 2022-23, up 13.64 per cent from Rs 2,372.65 crore in the corresponding quarter a year ago.

"Our overall EBITDA declined by 13 per cent driven by unprecedented global commodity inflation, upfront marketing investments and a weak performance in our Indonesia and Latin America & SAARC businesses," GCPL Managing Director and CEO Sudhir Sitapati said.

GCPL's India revenue was up 11.36 per cent to Rs 1,849.41 crore in the April-June quarter, as against Rs 1,660.65 crore in the corresponding quarter a year ago.

However, in Q1/2022-23 GCPL's domestic "volume declined by 6 per cent," said an earning statement from GCPL.

Revenue from the Indonesian market was down 8.49 per cent to Rs 376.51 crore, as compared to Rs 411.47 crore in the year-ago period.

GCPL's revenue from Africa (including Strength of Nature) market was up 12.19 per cent at Rs 778.87 crore, as against Rs 694.23 crore a year ago.

While, revenue from other markets was down 3.54 per cent to Rs 154.05 crore in Q1/FY 2022-23, as against Rs 159.72 crore a year ago.

"Our Africa, USA and Middle East business continued its robust growth trajectory, growing at 12 per cent in INR and in constant currency terms. Performance in our Indonesian business was weak, declining by 9 per cent in INR and 12 per cent in constant currency terms," said Sitapati.

On outlook, he said with inflationary pressures abating, the company expects a "recovery in consumption and gross margins" alongside continued higher marketing investments.

"We continue to have a healthy balance sheet and our net-debt-to-equity ratio continues to drop. We are on a journey to reduce inventory and wasted cost and are deploying this to drive profitable and sustainable volume growth across our portfolio through category development," said Sitapati.

Shares of Godrej Consumer Products Ltd on Wednesday afternoon were trading at Rs 856.50 on BSE, down 0.98 per cent from the previous close.