Company Update : Godrej Consumer Products by Motilal Oswal Financial Services Ltd
Consol. sales to grow in high teens in 1Q
Godrej Consumer Products (GCPL) released its pre-quarter update for 1QFY27. Following are the key takeaways:
India Business
* India’s standalone business is expected to deliver double-digit revenue growth (10% in 4QFY26), led by high-single-digit UVG (8% in 4QFY26).
* Growth was broad-based across categories, while overall demand remained stable despite inflationary pressures.
International Business
* Indonesia posted mid-teen revenue growth (-2% in FY26) with double-digit volume growth, aided by easing competition and sustained market share gains.
* GAUM continues to deliver strong double-digit sales growth (23% in FY26) and teen volume growth, supported by broad-based traction across markets and categories.
Consolidated Business
* Consolidated revenue growth is expected in high teens (8.5% in FY26, 11% in 4QFY26), ahead of the full-year double-digit guidance.
* Growth was supported by strong high-single-digit UVG and sequential improvement across most business metrics.
Costs and Margins
* The company witnessed elevated crude-linked input costs, raw material volatility, and some sourcing challenges in 1QFY27.
* Consolidated EBITDA growth is likely to remain healthy in double digits. However, margins are expected to be lower due to cost pressures.
* The company mitigated inflationary pressures through pricing, cost savings, and media optimization, while input costs started easing toward the end of the quarter.
Outlook
* Management remains confident of delivering FY27 guidance, with potential to outperform on select metrics.
* Margin recovery is expected to be gradual through the year as cost pressures moderate.
* Stable demand in India, improving performance in Indonesia, and strong GAUM performance support a constructive overall growth outlook.
* Meanwhile, El Niño conditions could increase weather-related volatility across key markets and potentially affect agricultural output and rural demand. The company does not expect any material impact, supported by its geographically diversified sourcing network and portfolio.
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