Godrej Consumer Products stock surges 3% post Q4 results

Shares of Godrej Consumer Products rose nearly 3% in early trade on Thursday after the consumer goods company reported better-than-expected earnings in the March 2023 quarter, driven by improvement in volume and margins. The FMCG stock has been rising for the last five sessions and gained over 6% during this period.

Extending its gaining streak, Godrej Consumer Products shares surged as much as 2.8% to ₹990 against the previous closing price of ₹962.60 on the BSE.  On the volume front, 0.46 lakh shares changed hands over the counter in the first two hours of trade as compared to the two-week average volume of 0.47 lakh stocks, while the market capitalisation rose to ₹1 lakh crore.

The large-cap stock touched its 52-week high of ₹994.45 on April 24, 2023, while it hit a 52-week low of ₹708.60 on June 17, 2022. The stock has given 26% returns in the last year, while it has risen 20% in a six-month period and 2% in a month. In the calendar year 2023, the counter has added more than 10%.

The Mumbai-headquartered firm has reported a 24.5% year-on-year (YoY) rise in consolidated net profit at ₹452 crore for the fourth quarter ended March 31, 2023, against the profit of ₹363.2 crore in the corresponding quarter last fiscal.

Revenue from operations rose 9.8% to ₹3,200 crore from ₹2,915.8 crore in the year-ago period, said Godrej Consumer Products in its regulatory filing.

On the operating front, Earnings before Interest and Tax, Depreciation, and Amortisation (EBITDA) climbed 37.1% to ₹641 crore as against ₹467.6 crore in the year-ago period. The EBITDA margin improved to 20% as against 16% in the same period last year.

For the financial year 2023 (FY23), the consolidated net profit fell 4.5% to ₹1,702.5 crore, while revenue climbed 8.5% to ₹13,316 crore as compared to the previous fiscal.

“We had a strong end to the year with volume-led double-digit sales growth in 4Q FY 2023. Consolidated sales grew by 10% in INR terms and 14% in constant currency terms. We have continued to witness sequential improvement in volume growth with a 6% year-on-year increase in Q4," said Sudhir Sitapati, Managing Director and CEO, GCPL.

Sitapati further said that the company expects to build on the current momentum and deliver volume-led growth along with upfront marketing investments and improvement in profitability. “We remain committed to our purpose of bringing the goodness of health and beauty to consumers in emerging markets.”

As per the company, India business sales grew 12% YoY led by volume growth of 11%, whereas Africa, U.S., and Middle East clusters delivered high single-digit sales growth of 8% in constant currency terms. Core business performance improves in Indonesia with sales growth of 5% in constant currency terms, it added.

Segment-wise, the home care business grew by 14%, while personal care logged a growth of 17%. 

Last month, the company acquired the fast-moving consumer goods (FMCG) business of Raymond Consumer Care Limited (RCCL) for ₹2,825 crore. Raymond owns deodorants and sexual wellness brands like Park Avenue and KamaSutra.

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