Godrej Consumer Products Ltd.'s third-quarter profit rose but margin contracted on inflation pressure.
Net profit of the maker of Good Knight mosquito repellent and Cinthol soaps rose 5% over the year earlier to Rs 527.6 crore in the three months ended December, according to an exchange filing. That compares with the Rs 498.26-crore consensus estimate of analysts tracked by Bloomberg.
Q3 FY22 Highlights (YoY)
Revenue rose 8% to Rs 3,302.6 crore, compared with the Rs 3,296.9-crore forecast.
Operating profit slipped 3.6% to Rs 667.9 crore, against a projection of Rs 696.68 crore.
Margin came in at 20.2% against 22.7%. Analysts had pegged it at 21.1%.
Sales from India business grew 7.2%.
Indonesia posted a 2% drop in revenue in constant currency, while Africa, the U.S. and the Middle East grew 12%. Latin America and SAARC registered 19% growth.
The Godrej Group firm registered 12% growth in the personal care segment, while home care business delivered 3% growth over the previous year, according to its investor presentation filed with the stock exchange. In Q2, the home care segment had grown 5% year-on-year.
Within personal care, it was a “soft quarter” for the hair colours category, the company said. It gained market share in soaps led by marketing initiatives.
Sudhir Sitapati, managing director and chief executive officer, said the third quarter was “entirely driven by price-led growth”. “With the relatively non-discretionary, mass pricing of our portfolio and very good performance on market shares, volume growth will return in the medium term.”
The company has also seen a spike in sales through its e-commerce channels. Currently, it contributes about 5% to overall sales, the presentation said.
In its Q3 update released earlier, the consumer goods maker had said “unprecedented cost inflation” impacted its margins during the quarter.
Shares of Godrej Consumer ended 1.17% lower compared with a 0.31% gain in the benchmark Nifty 50.
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