Godrej Consumer Products Ltd (GCPL) has indicated that its operating margins are likely to come under pressure in the first quarter of fiscal year 2027 despite reporting strong revenue growth, as elevated commodity costs weighed on profitability.
In its quarterly business update released on Friday, the FMCG major said it expects to deliver high-teens consolidated revenue growth in the June quarter, comfortably ahead of its full-year guidance of double-digit growth.
The company also projected high single-digit volume growth during the quarter, suggesting that demand remained healthy across its portfolio. However, GCPL cautioned that profitability will be impacted by exceptional cost pressures.
"Commodity input costs remained elevated," the company said, adding that margins are expected to be lower in the first quarter due to these pressures. Despite the near-term impact, the company said it expects margins to recover progressively over the rest of the financial year and reiterated that it remains firmly on track to deliver its full-year guidance.
The maker of Good Knight insecticides, Cinthol soaps and HIT household insecticides also said it expects Ebitda growth to remain in double digits for fiscal year 2027.
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On the domestic front, GCPL said its standalone business is likely to report double-digit revenue growth in the June quarter.
International operations also delivered a strong performance.
The company's Indonesia business recorded mid-teens revenue growth, with growth described as broad-based across categories. Meanwhile, its Godrej Africa, USA and Middle East (GUAM) business posted strong double-digit growth, continuing its healthy momentum.
Despite the encouraging start to the financial year, the company said it remains mindful of the potential impact of El Niño conditions, which could affect demand and input costs in the coming months.
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