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Godrej Consumer net beats forecast as intl ops drive growth

Godrej Consumer net beats forecast as intl ops drive growth
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First Published: Mon, May 02 2011. 06 19 PM IST
Updated: Mon, May 02 2011. 06 19 PM IST
Mumbai: Personal care products maker Godrej Consumer Products Ltd posted a forecast beating 54% jump in net profit, boosted by several acquisitions in the past year and as volume growth aided sales.
The company posted a net profit of Rs 142 crore from Rs 91.76 crore in the same period a year ago. Net sales nearly doubled to Rs 1000 crore.
A Reuters poll of 19 brokerages had forecast a consolidated quarterly net profit of Rs 117 crore.
“Acquisitions done in the past year have helped our performance. On the domestic front the sales are driven by volumes. Approximately 5% of the growth is driven by pricing changes,” said chairman Adi Godrej.
The company expects to grow at an compounded annual growth rate (CAGR) of 25-30% in FY12, and going forward via a mix of organic and inorganic means.
Over the past year Godrej Consumer acquired personal care firm Tura in Nigeria, household insecticides firm Megasari in Indonesia, hair care firms Issue and Argencos in Latin America along with the 51% in its Indian joint venture with Sara Lee Corp.
In India, it recently acquired Naturesse Consumer Care Products Ltd and Essence Consumer Care Products Ltd, which own the brands ‘Swastik´ and ‘Genteel´.
The earnings per share stood at Rs 16.1 in FY11 compared to Rs 11.3 in FY10 on the back of EPS accretiveness of the new acquisitions and strong growth in the domestic business.
The company’s international operations, which contribute to 35% of total consolidated sales, more than quadrupled to Rs 347 crore.
The domestic business grew 25% to Rs 111 crore on net sales which jumped 53% to Rs 657 crore.
Personal wash biz under pressure
While the firm remained optimistic about its haircare and household insecticides business, which grew 18% and 17% respectively in the fourth quarter, it expressed concern about margin pressures in its soaps business because of rising raw material costs.
“It has been a difficult year in soaps. There are margin pressures in this business because of rising input prices,” Godrej said.
Soaps contributes to 30% of the company’s total standalone revenues. The domestic personal wash segment grew by 13% in the fourth quarter with a market share of 9.7% in March.
Godrej raised soap prices by 4-5% in April in an effort to battle mounting raw material costs. It had already raised soap prices by 3-5% in January, after a hike of 5% in September last year.
Prices of palm oil, a key ingredient for soaps, have been rising steadily in India, forcing many consumer companies to hike prices.
Shares of the company ended 4.32% up at Rs 392.45 in a weak Mumbai market.
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First Published: Mon, May 02 2011. 06 19 PM IST