According to Godrej Consumer Products Limited (GCPL), the country’s FMCG industry has been continuously ‘affected by inflationary levels’, leading to a continuous rise in prices as well as impacting volumes during the three months ended June.
In its update for the first quarter of the current fiscal, the FMCG player also said that rural markets witnessed slower growth than urban areas.
As per the update, in the domestic market, the company will have “mid-single-digit volumes on a high basis, 3-year volume CAGR close to mid-single digit”.
“The Indian FMCG Industry remained soft during the quarter. GCPL said it continues to be impacted by rising inflation levels due to geopolitical tensions, which has led to a steady rise in prices and impacted volumes.
In recent months, inflation has been rising in most markets around the world.
In international markets, GCPL said its Indonesian operations, which is the company’s second largest market after India, also faced impact on consumption and margins.
“In Indonesia, with a reduction in hygiene performance following COVID-19 and a large sanitation comparator in the base, we expect high single-digit sales declines. Sales performance was largely flat excluding sanitation,” it said. Told.
GCPL said it is putting in place the building blocks to drive the growth of the category and drive normal business delivery to ensure gradual recovery over the medium term.
“In Godrej Africa, the United States and the Middle East, we continued our growth momentum across most of our key operating countries. We expect to deliver double-digit sales growth with a continued focus on driving sustainable, profitable sales growth. ,” it said.
In addition, it expects constant currency sales growth in the high teens in the Latin American business.
“At a consolidated level, we continue to leverage our category and geographic portfolio. We expect to deliver high single-digit sales growth and double-digit 3-year CAGR,” the company said.
With regard to profitability in the June quarter, GCPL said it expects lower EBITDA (earnings before interest tax and amortization) margins to be lower year-on-year.
“This is due to input inflation, advance marketing investments to fuel the growth of the category and weak performance in Indonesia,” GCPL said.
The company’s quarterly update provides an overall summary of operating performance and demand trends for the quarter ended June. After this, detailed information about the financial results for the June quarter will be given.
However, with the easing of inflationary pressures and significant recovery in palm oil derivatives and crude, GCPL said it expects improvement in “consumption and gross margins” in the coming quarters.
In the domestic market, GCPL witnessed mixed performance in its personal care and home care categories.
“Personal Care maintained its strong double-digit growth trajectory with a 2-year CAGR that was in double digits led by both personal wash and hair color. Home care grew in low single-digit sales on a high basis. There was a decline. However, the 2-year CAGR remained in the high single digit figure.”