Company Update : Godrej Consumer Products by Motilal Oswal Financial Services Ltd
Consol mid-single-digit value growth; EBITDA expected to decline
Godrej Consumer Products (GCPL) released its pre-quarterly update for 2QFY26. Following are the key takeaways:
GST 2.0
* The company expects recent GST reforms to strengthen consumer demand.
* Nearly one-third of GCPL’s portfolio (toilet soaps, talcum powders, shampoos, shaving creams) is now taxed at 5%, down from ~18%.
* GCPL has passed on GST benefits to consumers effective 22nd September, 2025. Reforms are expected to act as a structural growth driver, enabling volume-led expansion.
* Short-term trade channel adjustments were observed, with distributors and retailers focused on liquidating old inventories, delaying new orders, and temporarily deferring consumer purchases.
India business
* The standalone India business is expected to deliver mid-single-digit value growth.
* Underlying volume growth (UVG) is expected to remain in low single digits.
* Short-term profitability was impacted due to the GST transition.
* Home Care is experiencing strong momentum, with high single-digit value growth expected.
* Personal Care is expected to experience a low-single-digit decline, primarily due to the soaps category.
International performance
* Indonesia witnessed increased competitive pricing. It is expected to witness a low single-digit decline in value growth, with a slightly positive UVG.
* GAUM (Godrej Africa, USA, Middle East): It is expected to deliver doubledigit value and volume growth, marking a third consecutive strong quarter.
Consolidated performance
* Overall, the company expects to post a mid-single-digit INR revenue growth.
* It anticipates short-term profitability pressure, with EBITDA likely to decline for the quarter.
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