Godrej Consumer, GST destocking drag on Godrej Industries’ Q1 earnings
Mumbai: Godrej Industries Ltd (GIL) reported a 42% year-on-year (yoy) decline in net profit as a poor performance by Godrej Consumer Products Ltd (GCPL) and Godrej Properties Ltd dragged down the parent firm’s earnings for the quarter ended 30 June 2017.
GIL reported a net profit of Rs37 crore, attributable to the owners of the company, for the quarter even as its profit before interest and tax fell 8% yoy to Rs250 crore. However, it was able to maintain growth in revenue, which increased 7% yoy to Rs2,273 crores.
“As you know, in June, most businesses suffered because of down-stocking of trade pre-GST (goods and services tax),” Adi Godrej, chairman of GIL, said in a phone interview. “This was an exceptional situation. Many of our businesses, especially GCPL and GAVL (Godrej Agrovet Ltd), and the chemicals business were affected,” he said.
GCPL had reported an 8.7% decline in Ebitda (earnings before interest, tax, depreciation and amortization) and an 8.5% decline in net profit for the quarter ended June.
Meanwhile, Godrej Agrovet Ltd reported flat volumes in the animal feeds business, the largest business segment by sales for the firm.
“The prices of animal feed were a little lower (during this period) and this is not likely to change a lot,” Godrej said in the interview.