In its quarterly update, Godrej Consumer Products Ltd (GCPL) stated, in India, the operating environment continues to remain similar to Q2. Despite this, the FMCG company’s organic business delivered steady underlying volume growth of mid-single digit. Growth was broad-based across both Home Care and Personal Care. Park Avenue and KamaSutra brands continue to perform well and are on track to achieve full-year ambition. Reported volume growth continues to be double digit, the company stated in the update
Globally, GCPL’s Indonesia business continues to deliver compelling performance, with close to double digit volume growth and high-single digit constant currency sales growth. The GAUM (Godrej Africa, USA, and Middle East) business had a flattish to mild decline in volume growth. This was driven by trade destocking in geographies that the company plans to restructure in Q4. Although it sustained double-digit constant currency sales growth, the impact of the Naira devaluation will result in high-single digit sales decline.
LATAM business revenue has been severely impacted on account of the sharp devaluation in Argentinian Peso from 361 to 808 which due to hyperinflation accounting has impacted nine months of revenue. This is likely to have a negative impact of mid-single digit on the consolidated sales. However, the impact on profit is minimal, the company stated. Despite the challenging environment, the LATAM business continues to deliver positive volume growth.
At a Consolidated level (organic), GCPL expects to deliver mid-single digit volume growth, double-digit constant currency sales growth but low-single digit sales decline in INR terms due to GAUM and LATAM currency and hyperinflation accounting impact. Reported volume growth is likely at high-single digit and reported sales growth to be flattish in INR terms.
It stated that the company will continue to drive year-on-year expansion in EBITDA (incl. Forex) margin despite significantly higher category development investments.