Godrej Consumer Products Share Price Declines 5% After Disappointing Q3 Forecast

Godrej Consumer Products‘ share price declined by 5 percent in the morning session on January 8, 2024. The company announced expectations of low-single-digit sales for the quarter ended December 31. The company stated that the domestic operating environment for FMCG companies mirrored the previous quarter, marked by low rural offtake. Nevertheless, Godrej anticipates maintaining steady underlying volume growth in the mid-single digits.

GCPL reported broad-based growth across Home Care and Personal Care segments, highlighting strong performance from the Park Avenue and KamaSutra brands, which are on track to meet the full-year targets.

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Despite this growth, the company foresees flat sales growth in rupee terms, attributing it to year-on-year expansion in EBITDA (including Forex) margin despite increased category development investments.

However, the LATAM business faced significant challenges due to the sharp devaluation of the Argentinian Peso from 361 to 808. It resulted in severe impacts on revenue for nine months due to hyperinflation. This situation is expected to negatively impact consolidated sales by a mid-single-digit percentage.

The company stated that despite the challenging environment, the LATAM business continued to achieve positive volume growth, with minimal effects on profit.

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