- Godrej Consumer expects a 6-9% cost rise if crude and palm oil prices stay high
- Company aims to offset cost increases through pricing, savings, and media optimization
- Double-digit sales growth expected for standalone business in quarter ended March 2026
Godrej Consumer Products Ltd., in its quarterly business update, indicated that the company may face a significant cost uptick if crude and palm oil prices stay elevated.
"We have seen and navigated larger volatility in commodities in the past than we are experiencing at this stage. With Brent crude at between $100-110 and palm at between 4500 - 4800 MYR we expect a cost hit of 6-9%," it said.
"We should be able to offset the impact of most of these cost increases through pricing, cost savings, leverage, and some prudent media optimization. Elevated costs augur well for formalization of the demand in categories like burning formats of household insecticides and upgradation in laundry supporting stronger demand. Hence, even if costs remain at these levels, we should be broadly in line with our original bottom line plans for FY27 while stepping up revenue growth," the company added.
Speaking about the quarter ended March 31, 2026, the firm stated that it expects to deliver double-digit sales growth for its standalone business.
"Excluding soaps, volume growth continues in double-digits, positioning GCPL among the volume growth leaders in the Indian FMCG (fast moving consumer goods) sector," the company added.
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Godrej Consumer stated that its growth has been "broad-based", with the firm have branched into emerging markets, targetting lower income demographics and intrdoucing new products. The company also said that future categories are "growing well".
The standalone EBITDA (earnings before interest, taxes, depreciation and amortisation) margins are expected to sustain within the company's normative range, on the back of notable cost savings the company made in the fourth quarter.
The company is also expecting to post nearly a double-digit revenue growth on a consolidated basis.
The FMCG company also said that its Indonesia business is showing signs of stabilisation.
"As guided earlier, our Indonesia business continues to show signs of stabilization with the peak of the competitive intensity behind us. Underlying volume growth is expected at mid-single digit in the fourth quarter, with market share gains sustained across categories," Godrej Consumer said.
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