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Business News/ Companies / Consumer goods cos to post robust Q3 earnings on better volumes
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Consumer goods cos to post robust Q3 earnings on better volumes

Consumer goods cos to post robust Q3 earnings on better volumes

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Mumbai: India’s consumer staple firms are expected to report higher profits in Oct-Dec aided by a dip in raw material costs and better volumes, with Godrej Consumer being a top pick in the mid-cap space for analysts.

Personal care products maker Godrej Consumer Products’ profit is seen doubling from a year ago, rival Marico is expected to report a 24.4% jump in profits, and oral care products maker Colgate Palmolive (India) net would rise nearly 18%, a Reuters poll of brokerages showed.

“Healthy volume growth and margin expansion from lower input costs, will keep earnings growth strong during the quarter," brokerage Batlivala & Karani said in a report.

Godrej Consumer Products is seen reporting a robust growth in net profit as prices of its key raw material palm oil fell and as its soaps and hair colours portfolio grew, analysts said.

“The lower prices of palm oil are expected to boost the bottom-line for Godrej Consumer. Although the company has spent more on advertisements, it would post a strong bottom-line growth," Ashish Upganlawar, an analyst at Sharekhan said.

Godrej’s soaps and hair dye segments are expected to see a rise of 15% and 25% in sales, he added.

Palm oil prices have fallen about 35-40% in Oct-Dec versus the year ago period, analysts said.

Godrej Consumer had also taken forward covers on palm oil till Dec 2009, and this would aid margin expansion in the current fiscal, Anand Shah, an analyst at Angel Broking said.

Rival Marico can expect profits to be up a quarter as sales got a boost from an increase in volumes of its flagship products Saffola and Parachute.

“We expect continued traction in Parachute and Saffola. The hair care portfolio is expected to maintain double digit volume growth," brokerage Motilal Oswal said in a report.

Sharekhan’s Upganlawar expects a 3% and 9% volume growth in its Saffola and Parachure portfolios respectively, for the quarter.

Colgate Palmolive (India) should see profit rising on the back of steady volume growth in toothpaste products.

Colgate’s sales would be driven by “strong double digit toothpaste volume growth of 13% and continued resilience in market shares across oral care categories," Prabhudas Lilladher said in a note.

Colgate is seen reporting net profit of Rs913.1 million on sales of Rs4.9 billion.

Godrej Consumer is expected to post a profit of Rs815.2 million on sales of Rs5.13 billion, while Marico may post a net of Rs633.1 million on sales of Rs6.99 billion.

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Published: 18 Jan 2010, 02:56 PM IST
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