GCPL Q2 net profit surges 22% to INR 287 crore

PTI, Zee News, 24 October 2015

FMCG major Godrej Consumer Products Limited (GCPL) today reported a 22.44 per cent increase in its consolidated net profit at Rs 287.16 crore for the second quarter ended on September 2015 on the back of a healthy volume growth.

The company had reported a net profit of Rs 234.53 crore in the same period last year, GCPL said in a BSE filing.

GCPL's total income from operations on consolidated basis was also up 8.97 per cent at Rs 2,244.94 crore during the quarter under review as against Rs 2,060.12 crore of July-September of the last fiscal.

Godrej Group Chairman Adi Godrej said: "In Q2 of FY16, we continued our double-digit growth in sales and profits. Our India business branded net sales grew by 10 per cent, driven by a healthy volume growth of 9 per cent. This competitive performance was delivered despite the softness in rural demand and a deficient monsoon."

GCPL's international business churned out a strong sales growth of 15 per cent and EBITDA growth of 35 per cent.

"This was aided by lower commodity costs, stringent cost management and effective leveraging of our brand platforms," he said.

GCPL's consolidated net profit for the first half of 2015-16 was up 28.68 percent to Rs 486.39 as against Rs 377.98 crore a year ago.

Net sales during the first half of the current fiscal were Rs 4,342.60 crore, up 9.97 per cent, from Rs 3,948.63 crore a year ago.

"We have sustained our strong and competitive performance in the first half of fiscal year 2016 with sales growth of 12 per cent and EBITDA growth of 26 per cent, in organic constant currency terms. We have grown ahead of the market and gained share in our core categories, aided by our continued focus on innovations, competitive marketing investments and strong on-ground execution," said Godrej.

On outlook, he said medium and long-term growth prospects in India and group's other emerging markets remain robust.

"We believe that there is still a lot of headroom for growth across these markets, given the low penetration and consumption rates in our core categories. I am confident that with our clear strategic focus, differentiated product portfolio, superior execution and top-notch team, we will continue to deliver industry-leading results in future," said Godrej.

Meanwhile, in a separate filing, GCPL informed that the board of the company in its meeting held today has declared a second interim dividend of 100 per cent of Re 1 per share on the face value of Re 1 each for 2015-16.

According to GCPL MD Vivek Gambhir, this quarter has a "fairly broad-based growth" in spite of a deficient monsoon.

"The standard performer was hair colour, where we have 17 per cent growth. And in household insecticide, we have 13 per cent growth. In spite of price competition, we have 3 per cent value growth in soap segment," Gambhir told PTI.

He added that this is the second quarter of good growth and GCPL has maintained its momentum.

Despite India business branded net sales increasing 10 per cent and 9 per cent by volume, Gambhir sees the environment "very challenging".

"Overall, at an industry level, the market environment is more or less same... There is a gradual uptick in urban, but rural part is still stuck," he added.

In the international market, GCPL had clocked a growth of 18 per cent based on constant currency, but posted a growth of 11 per cent due to significant depreciation of the currencies against the rupee.

"The two biggest performers are Africa, which has grown over 33 per cent on constant currency basis, and Latin America with a growth of about 24 per cent," Gambhir said.