Godrej Consumer Products gained 2.91% to Rs 856.30 after the company said that in India, it expects to deliver early double-digit sales growth in Q1 FY23 on a high base.
In its quarterly update, the company said that some of its short-term challenges such as continued unprecedented global commodity inflation and the performance of its Indonesia business, as highlighted in the previous quarter, continued to play out in this quarter as well, impacting consumption and margins.The Indian FMCG industry continued to remain soft during the quarter. It continued to be hit hard by inflation levels aggravating due to geopolitical tensions, leading to successive price increases and impacting volumes. Rural markets witnessed slower growth compared to urban.
However, the recent correction in commodity prices and the forecast of a good monsoon are encouraging. The company said it remained competitive given the relatively non-discretionary mass pricing of their portfolio.
In India, the company expects to deliver early double-digit sales growth on a high base during the quarter and 3-year compound annual growth rate (CAGR) is expected to remain robust and in early double-digits.
In Indonesia, as hygiene performance waned after COVID-19 and there is a large hygiene comparator in base, the company expects a high single-digit sales decline.
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In Godrej Africa, USA and Middle East, Godrej Consumer expects to deliver double-digit sales growth, with a continued focus on driving sustainable, profitable sales growth.
Further, the company is expecting a constant currency sales growth in the high teens in its Latin America business.
"At a consolidated level, we continue to leverage our category and geographic portfolio. We expect to deliver high single-digit sales growth and a 3-year CAGR in double-digits.
On the profitability front, we expect lower year on year EBITDA margins during the quarter. This is due to input inflation, upfront marketing investments to drive category development and weak performance in Indonesia.
However, with inflationary pressures abating and significant correction in palm oil derivatives and crude oil, which are some of our key raw materials, we do expect recovery in consumption and gross margins in the upcoming quarters," the consumer goods maker said in a statement.
Godrej Consumer Products is an Indian consumer goods company. The company's products include soap, hair colorants, toiletries and liquid detergents.
On a consolidated basis, Godrej Consumer Products' net profit fell 0.7% to Rs 363.24 crore despite of a 7% increase in net sales to Rs 2,894.15 crore in Q4 FY22 over Q4 FY21.
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