Godrej Consumer Products Ltd’s (GCPL’s) June quarter performance insights have not quite stirred investors. Domestic volume growth was in mid-single digits in the first quarter (Q1) of FY20.

Considering that volume growth was at a healthy 14% in the three months ended 30 June 2018, the mid-single digits growth on a high base should have been heartening, more so because growth in the previous two quarters was just about 1%. But hardly. That is so, because growth was in line with expectations, say analysts.

“GCPL should report subdued volumes," said Varun Lohchab of Jefferies India Pvt. Ltd in a consumer staples June quarter preview report on 3 July. He estimated volume growth of 4% for the company. Quite clearly, there does not seem to be much of an outperformance here.

Factors such as new product launches, marketing campaigns and consumer offers, helped GCPL rake in higher sales, compared to previous quarters.

Still, it hasn’t helped much in value terms. The sales value growth for Q1 FY20 is marginally better than the last quarter’s (Q4 FY19) value growth, said the company.

The India business accounted for 55% of GCPL’s revenues in FY19.

Moving on to the June quarterly update, another key market, Indonesia, too, remained lacklustre with the company recording close to mid-single digit constant currency sales growth. In GAUM (or Godrej Africa, US and Middle East), constant currency sales growth was in low-single digits.

In short, there is little to cheer about as far as the quarterly updates go. GCPL’s shares ended marginally lower on Monday, even as the Nifty 50 index closed higher.

Of course, a slowdown in consumption is keeping the demand outlook subdued for all consumer goods companies.

That said, in particular, GCPL’s outlook remains weak primarily because the domestic competitive intensity is likely to keep its growth in household insecticides segment capped for some more time.

During the March quarter, household insecticides sales were impacted by an extended winter this year and the diversion of its share of growth to incense sticks. For soaps, a high base already poses a hurdle to growth, warn analysts. The international business, too, has been a sore point.

“While GCPL has underperformed its peers over the past two years and valuations are now compelling; we still wait for catalysts as business performance is yet to show signs of improvement," said Deutsche Bank in its review of the Q4 FY19 results.

Of course, investors are factoring in the sluggishness in performance. Currently, the GCPL stock trades at 41 times estimated earnings for FY20, relatively cheaper than peers. But it may not be cheap enough for investors to be excited just yet.

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