Mumbai: Godrej Consumer Products Ltd (GCPL), makers of Cinthol soaps and Hit insecticides, on Monday reported a 4.34% decrease in its consolidated net profit to Rs351.78 crore in the quarter ended December compared with Rs367.75 crore a year ago.
Consolidated net sales increased 8.76% to Rs2,504.65 crore from Rs2,302.88 crore a year ago. A Bloomberg poll of analysts had estimated net profit at Rs328.50 crore and net sales of Rs2,436.30 crore for the December quarter.
“Despite a tough operating environment, we continued to deliver ahead-of-the-market profitable growth,” said Adi Godrej, chairman of GCPL, in a statement.
The India business of the company recorded a net profit rise of 19% to Rs231 crore on sales of Rs1,263 crore for the December quarter. “In India, while demonetisation has resulted in some near-term disruptions, we have outperformed the overall market with secondary sales growth of 2% during the quarter,” said Godrej in the same statement.
Among international businesses, in Indonesia, operating margin declined by 110 basis points year-on-year due to upfront sales and marketing investments. Sales growth on a constant currency basis was flat on a year-on-year basis, in line with the overall fast moving consumer goods (FMCG) market. However, constant currency sales growth (ex-household insecticides) was strong at 13%. Household insecticides growth was hut by adverse weather and relatively higher competitive intensity, the company said. One basis point is a hundredth of a percentage point.
The European business recorded a constant currency sales growth of 16% and saw its operating margins increase by 60 basis points due to stringent control over costs.
The Africa and Latin America businesses grew at more robust rates. “The Africa business grew at an organic constant currency sales growth of 19%. Africa, including Strength of Nature, which the company acquired in April grew at 54% on a constant currency basis. Operating margin saw a temporary decline of 160 bps year-on-year, driven by currency depreciation and upfront investments on sales infrastructure,” the company said.
For GCPL, the Latin American business increased by 24% in a challenging operating environment. The operating margins decreased by 390 bps year-on-year due to upfront marketing investments, the company said.
Shares of GCPL closed up 3.25% to Rs1601.00 on the BSE, while the benchmark Sensex was down 0.14% to 27,844.56 points.