In This Article:
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India Business Growth: 7% volume growth, 7% value growth.
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Standalone EBITDA: Flat performance.
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Standalone EBITDA Margin: 24.3%, affected by high palm oil inflation.
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Advertising and Promotion (AMP): Maintained at 11.6% despite margin pressures.
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Indonesia Performance: 7% volume growth, 9% revenue growth, 17% EBITDA growth.
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Africa (GO) Performance: Organic volumes declined 8%, value declined 10%, but reported EBITDA and Forex grew 33%.
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GO Margins: 14.5% due to macroeconomic stability in Argentina.
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LATAM Performance: 50% UVG, 46% USG, double-digit EBITDA margin.
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Overall Growth: 5% organic UVG, 5% organic USG, 8% reported EBITDA, 12% reported PAT.
Release Date: October 24, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
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Godrej Consumer Products Ltd (BOM:532424) reported a 7% volume and value growth in its standalone India business, despite challenging market conditions.
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The company maintained its advertising and media investments at 11.6% of sales, even amidst margin pressures, indicating a strong commitment to brand building.
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Indonesia showed robust performance with 7% volume growth, 9% revenue growth, and 17% EBITDA growth, driven by core categories like air care and household insecticides.
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The Latin America business performed well with 50% unit volume growth, 46% sales growth, and double-digit EBITDA margins, suggesting a structural improvement in profitability.
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The company is optimistic about its revamped product portfolio, including the relaunch of HR with RN molecule, which is expected to drive future growth.
Negative Points
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EBITDA margins in the standalone India business were flat and at the lower end of the targeted range due to high palm oil prices and import duties.
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The soaps category is under pressure due to high palm oil prices, and the company expects volume growth to remain range-bound for the next few quarters.
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The Africa business experienced a decline in organic volumes and value, although reported EBITDA and Forex grew by 33%.
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The company anticipates continued margin pressure in the short term due to volatile palm oil prices and has not fully offset inflation with price increases.
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Urban general trade is facing challenges due to the rise of quick commerce and pressures on urban consumption, impacting overall growth.
Q & A Highlights
Q: Can you elaborate on the growth in incense sticks and coils, and is this growth more prominent in rural India? A: We are seeing a reversal with rural areas growing at twice the rate of urban areas. Both coils and incense sticks have grown well in urban areas too. In regions where we launched RNF, performance has been better, indicating positive results. However, it's too early to declare victory as we are still observing secular growth across urban and rural areas. - Sudhir Sitapati, MD & CEO