Godrej Consumer Products Ltd. expects "double-digit" sales growth in the three months through December, driven by higher demand for its home care and personal care products and easing input costs.
The consumer goods maker said that its performance has also gotten better since the previous two quarters when sales grew by 7%.
Volumes, too, have improved to report low single-digit growth after declining for at least the last five quarters. This comes at a time when India's fast-moving consumer goods sector is witnessing slower growth, driven by poor rural consumption and a slowdown after the festive season.
Marico Ltd., a peer, has expressed similar concerns about rural demand.
The Parachute hair oil maker said that its revenue growth has slowed in the third quarter, impacting its operating profit, due to a muted recovery in rural demand amid elevated inflation. The company, however, expects its margins to improve as key input costs and consumer prices stabilise.
Godrej Consumer said that it expects its overall profits to see a "meaningful improvement", led by gross margin recovery and continued marketing investments translating to high single-digit Ebitda growth.
At a consolidated level, the maker of Goodknight mosquito repellents and Cinthol soaps expects to report sales growth in the mid-teens in constant currency terms and around double-digits in rupee terms with flattish volumes.
The company has started to see "gradual recovery" in Indonesia, a key market where it was struggling to grow over the last few quarters as hygiene products took a hit after the Covid-19 wave ebbed and later stubbornly high inflation hurt demand. The Indonesia business, it said, has narrowed its sales to low single digits in constant currency from an 11% drop in the previous quarter.
Godrej Africa, the U.S.A, and the Middle East continued their strong sales growth momentum, clocking double-digit sales growth in constant currency terms.
Shares of Godrej Consumer advanced 2.30% after the company's update, compared with the 0.58% decline in the benchmark Nifty 50 as of 12.40 p.m.
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