GCPL reports Q1 net profit of Rs225 crore
Mumbai: Consumer packaged goods firm Godrej Consumer Products Ltd (GCPL) on Monday reported a consolidated June quarter net profit of Rs225.17 crore, against Rs 246.65 crore a year ago.
The results of the two quarters are not comparable since GCPL had acquired US company Strength of Nature in the year-ago quarter.
A Bloomberg poll of 13 analysts had estimated a profit of Rs284.4 crore for the June quarter. However, on account of higher advertising spending, the company missed these estimates.
Consolidated total income stood at Rs2,294.89 crore, missing the consensus estimate of Rs2,329 crore in a Bloomberg poll of nine brokers.
The introduction of goods and services tax (GST) had some effect as well. “In India, robust sales were witnessed in April and May but June sales dipped on the back of channel de-stocking in the run-up to the GST,” commented Nisaba Godrej, executive chairperson, GCPL.
Overall, India sales grew 6% to Rs1,186 crore from a year ago. “The sales growth is not surprising since consumer demand has not slowed down in India; the only slowdown was due to the de-stocking by wholesalers. Besides, GST had a more substantial impact on those companies which have more exposure to wholesale dealers and the rural segment, which GCPL does not,” said Abneesh Roy, senior vice-president, Edelweiss Financial Services.
Internationally, the Africa region grew at 26% on constant currency basis, while Indonesia declined 11% and Latin America business sales growth was at 4% over the year-ago quarter.
Among categories, soaps registered sales growth of 7% year-on-year, while secondary sales grew by 10%. The growth was led by price increases and promotional campaigns, the company said in its statement.
Hair colours’ primary sales grew by 5% year-on-year and secondary sales rose by 9% over the June 2016 quarter. The crème hair colours segment was led by double digit volume growth in Godrej Expert Rich Crème and the expansion of the BBLUNT chain of salons, the company said.
GCPL shares closed at Rs1,036.75 on the BSE, down 1.83% from their previous close, while the benchmark BSE Sensex closed 0.63% up at 32,514.94 points. The share traded at a 52-week high of Rs1,083.65 on 27 July.