Godrej Consumer Products expects double-digit sales growth in India for Q4FY22 driven by pricing; Stock jumps ~3%

7 Apr 2022 , 09:40 AM

Godrej Consumer Products Limited expects India to deliver close to double-digit sales growth in Q4FY22, driven entirely by pricing. The company’s 2-year CAGR would be in early twenties. Personal Care sustained its double-digit growth trajectory, primarily led by pricing in Personal Wash, while Home Care witnessed a soft performance on a high base, impacted by a relatively muted season for home insecticides and the discretionary nature of air fresheners.

At around 9.44 am, Godrej Consumer Products Ltd was trading at Rs774.10 per share up by Rs21.35 or 2.84% from its previous closing of Rs752.75 per share on the BSE.

“The Indian FMCG industry witnessed a consumption slowdown over the last few months. The sector continued to be hit hard by higher inflation levels, leading to successive price increases, and impacting volumes. Despite this, we remain competitive given the relatively non-discretionary, mass pricing of our portfolio. We have been gaining market share in 85% of our categories,” company said in a filing on Wednesday.

In Indonesia, with Hygiene performance waning after COVID-19 and a large Hygiene comparator in base, the company expects a sales decline in the high teens, in constant currency terms.

In Godrej Africa, the USA, and the Middle East, it continued growth momentum across most of key countries of operations and expects to deliver a constant currency sales growth close to the mid-teens.

“At a consolidated level, we continue to leverage our category and geographic portfolio. We expect to deliver a higher than mid-single-digit sales growth and a 2-year CAGR around midteens. In FY23, we expect to deliver early double-digit sales growth.

On the profitability front, we expect lower year-on-year EBITDA margins during the quarter. This is due to input inflation and our weak performance in Indonesia