GCPL Q3 profit up 35% to INR 263.57 crore

Sapna Agarwal, Livemint, 05 February 2015

Godrej Consumer Products Ltd (GCPL), the maker of Cinthol soaps and Hit insecticides, posted a consolidated net profit increase of 34.63% to Rs.263.57 crore for the quarter ended 31 December compared with Rs.195.77 crore a year ago, beating analyst expectations.

Consolidated net sales has increased by 12.5% to Rs.2,225.82 crore for the third quarter in fiscal year 2014-15 from Rs.1,978.88 crore a year ago.

A Bloomberg poll of 25 analysts had estimated net profit of Rs.247.60 crore and net sales of Rs.2,204.7 crore for the December quarter.

“Sales momentum has returned and this has been accompanied by a healthy growth in net profit,” said Vivek Gambhir, managing director, GCPL, adding that the quality of growth has been good across locations.

International business accounts for 48% of the company’s revenues. As such, the Africa business had sales growth of 36% on a constant currency basis and the Latin American business grew 25%. However, in Europe, sales declined by 13%.

During the quarter, the company acquired 100% stake in Frika Hair, a premium hair extension brand in South Africa.

Net profit of the India business grew by 16% to Rs.172 crore from Rs.148 crore a year-ago. Domestic net sales grew by 12% from Rs.1,045 crore to Rs.1,167 crore in the December quarter. Of the 12%, about 8% was volume-led growth, said Gambhir.

Operating profit increased by 18% during the third quarter of the fiscal year from Rs.193 crore to Rs.228 crore.

The household insecticides business grew at 16% aided by new launches like the Neem low smoke coil and the demand for the Rs. 1 Good Knight fast card. The company plans to leverage its distribution to accelerate growth in the coming quarters.