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Godrej Consumer Products hosted a conference call on Sept 27, 2021. In the conference call the company was represented by Mr. Akhil Chandra: Business Head – Indonesia.
Key takeaways of the call
Analyst meet was focused on Indonesia business.
Indonesia business is witnessing gradual recovery; post tough 2nd wave of covid 19, company is taking various initiatives which are expected to drive sustainable sales growth.
Air freshener, which is a discretionary category, is also recovering. It used to contribute 30% of total sales, but currently it's contributing around 28% of total sales, as hygiene portfolio is now contributing more.
In hygiene space company launched new brand, which is now contributing 10% of the portfolio. Company has been focusing on building strong portfolio specially in the personal hygiene segment.
Healthcare portfolio is also scaling up; company is witnessing good growth in hair care segment.
Management expects sustainable profitable double digits sales growth ahead, driven by increased focus on premium part of the portfolio.
As Indonesian Rupee remained strong, management expects currency tailwinds for the short term.
Company has a good margin profile on e-commerce. In FY21 e-commerce business grew by 4.5 times. Management expects it to grow 2-3 times this year.
Company expects its e-commerce contribution to be 3% of total sales by next year (currently its 2%).
GCPL Indonesia expects some pressure on margin in the near term, but is confident of maintaining margin profile in the medium term on likely calibrated price increases in select categories and cost savings initiatives.
Selectively, wherever possible management is taking price increases where there is limited switching opportunity.
Company launched a shampoo hair color, which has led to extension of its existing brand. Management expects it to continue to perform well ahead.
Other Highlight
The Company (GCPL) has increased its stake in certain subsidiaries: (1) 95% to 100% in Godrej West Africa Holdings Ltd, (2) 95% to 100% Mauritius and Darling Trading Company Ltd and (3) 90% to 100% in DGH Phase Two Mauritius. All the companies are investment holding companies.
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