Godrej Consumer to deliver healthy volume, revenue growth in Q4 FY23, company says

Personal and home care major Godrej Consumer Products (GCPL) today said that the company is witnessing steady recovery in consumer demand in 2023. After subdued demand across urban and rural markets that impacted the fast-moving consumer goods (FMCG) companies’ performance over the last two years, consumers are finally coming back to the market with an appetite.

The Mumbai-based FMCG player today said in an exchange filling that it is expecting to deliver healthy gains in volume offtake and value sales. Since the past six-to-eight quarters, volume offtake had taken a beating due to steep price hikes by the players, which eventually impacted their margins.

“In India, consumer demand trends remained steady through the January-March) quarter, with FMCG sector expected to witness gradual recovery in growth rates. The performance of our India business has exceeded expectations especially on the volume front,” GCPL noted in the filling, adding “We expect to deliver double-digit volume and value growth. Our domestic branded business growth was very strong registering volume and value growth in teens. This is in line with our strategy of volume driven category development. Overall, the growth was broad based and led by double-digit volume and value growth in both Home Care and Personal Care”.

While GCPL is yet to announce its quarterly financial numbers, its update on the quarter comes as a welcome change that the manufacturers were eagerly waiting for. As commodities inflation remains at double digit rates, most companies in the FMCG sector - from Hindustan Unilever to Nestle and Britannia - had to increase prices. As a result, consumer had to trade down and purchase lower quantities - bringing down the overall volume uptake in the market. In December quarter, for instance, volumes shrank by 9 per cent year-on-year shows data from Nielsen.

But the latest revival in demand has changed the mood to positive. 

“At a consolidated level, we expect to deliver double-digit growth in rupee terms led by mid-single digit volume growth. The growth trends continue to improve sequentially. The quality of our profits should see improvement, led by Gross Margin recovery and continued marketing investments translating to strong double-digit EBITDA growth,” GCPL said.

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