Godrej Consumer Products Q3 Results: Profit Falls 14%, Misses Estimates

The trade landscape is undergoing significant transformation as modern trade gains share at the expense of general trade, leading to a reshuffle in the channel distribution mix. While rural markets continue to perform well, the urban slowdown is emerging as a serious concern, impacting overall growth trajectories. Premium product categories, once expected to drive growth, are now expanding at a slower pace, with demand dampened in urban areas.

Volumes for the second half this fiscal are projected to remain lower than the previous half levels, with recovery anticipated only after two quarters. The company also foresees one to two additional rounds of price hikes in the coming months, with pricing growth in Q4 expected to outpace Q3. Regional performance was mixed, with Indonesia posting strong numbers — volumes grew by 6%, and sales increased by 9% in rupee terms. However, sales in Africa, the US, and the Middle East declined by 8%.

Rising palm oil costs have further squeezed margins, with the standalone Ebitda margin dropping to 22.6%, below normative levels. Segment-wise, Home Care grew by 4%, and Personal Care by 2%, but premium formats in Household Insecticides suffered due to the urban slowdown. These headwinds underscore the challenges posed by inflationary pressures and changing consumer behavior.