Capitaline

Results 08-Aug-23

Analysis

Godrej Consumer Products

NP down 7.62%

For the quarter ending June 2023, consolidated Net sales (including other operating income) of Godrej Consumer Products has increased 10.37% to Rs 3448.91 crore compared to quarter ended June 2022. Sales of India segment has gone up 8.44% to Rs 2,005.48 crore (accounting for 57.54% of total sales). Sales of Indonesia segment has gone up 19.70% to Rs 450.69 crore (accounting for 12.93% of total sales). Sales of Africa segment rose 8.95% to Rs 848.57 crore (accounting for 24.35% of total sales). Sales of Others segment has gone up 17.36% to Rs 180.79 crore (accounting for 5.19% of total sales). Inter-segment sales rose Rs 33.87 crore to Rs 36.62 crore.

Profit before interest, tax and other unallocable items (PBIT) has jumped 58.66% to Rs 785.01 crore. PBIT of India segment rose 54.49% to Rs 633.60 crore (accounting for 80.71% of total PBIT). PBIT of Indonesia segment rose 72.73% to Rs 99.46 crore (accounting for 12.67% of total PBIT). PBIT of Africa segment rose 79.05% to Rs 44.01 crore (accounting for 5.61% of total PBIT). PBIT of Others segment rose 217.60% to Rs 7.94 crore (accounting for 1.01% of total PBIT).

PBIT margin of India segment rose from 22.18% to 31.59%. PBIT margin of Indonesia segment rose from 15.29% to 22.07%. PBIT margin of Africa segment rose from 3.16% to 5.19%. PBIT margin of Others segment rose from 1.62% to 4.39%. Overall PBIT margin rose from 15.66% to 22.52%.

Operating profit margin has jumped from 16.67% to 18.64%, leading to 23.43% rise in operating profit to Rs 642.84 crore. Raw material cost as a % of total sales (net of stock adjustments) decreased from 51.58% to 45.32%. Purchase of finished goods cost rose from 2.33% to 3.49%. Employee cost increased from 8.22% to 8.67%. Other expenses rose from 21.38% to 24.76%. Selling and administration expenses rose from 6.38% to 8.85%.

Other income rose 151.13% to Rs 69.11 crore. PBIDT rose 29.84% to Rs 711.95 crore. Provision for interest rose 111.07% to Rs 74 crore.

PBDT rose 24.29% to Rs 637.95 crore. Provision for depreciation rose 33.70% to Rs 76.29 crore.

Profit before tax grew 23.12% to Rs 561.66 crore. Share of profit/loss were nil in both the periods. Extraordinary items were decreased to Rs -81.78 crore. Provision for tax was expense of Rs 161.06 crore, compared to Rs 109.25 crore. Effective tax rate was 33.56% compared to 24.04%.

Minority interest was nil in both the periods. Net profit attributable to owners of the company decreased 7.62% to Rs 318.82 crore.

Promoters’ stake was 63.21% as of 30 June 2023 ,compared to 63.22% as of 30 June 2022 . Promoters pledged stake was 0.66% as of 30 June 2023 ,compared to 0.66% as of 30 June 2022 .

Full year results analysis.

Net sales (including other operating income) of Godrej Consumer Products has increased 8.47% to Rs 13315.97 crore. Sales of India segment has gone up 10.29% to Rs 7,667.16 crore (accounting for 56.99% of total sales). Sales of Indonesia segment has gone down 3.06% to Rs 1,653.03 crore (accounting for 12.29% of total sales). Sales of Africa (including strength of Nature) segment rose 11.97% to Rs 3,414.67 crore (accounting for 25.38% of total sales). Sales of Others segment has gone down 4.39% to Rs 717.83 crore (accounting for 5.34% of total sales). Inter-segment sales came down from Rs 180.76 crore to Rs 136.72 crore.

Profit before interest, tax and other unallocable items (PBIT) has jumped 5.16% to Rs 2,410.20 crore. PBIT of India segment rose 11.01% to Rs 1,900.56 crore (accounting for 78.85% of total PBIT). PBIT of Indonesia segment fell 14.10% to Rs 330.75 crore (accounting for 13.72% of total PBIT). PBIT of Africa (including strength of Nature) segment rose 29.52% to Rs 136.88 crore (accounting for 5.68% of total PBIT). PBIT of Others segment fell 52.85% to Rs 42.01 crore (accounting for 1.74% of total PBIT).

PBIT margin of India segment rose from 24.63% to 24.79%. PBIT margin of Indonesia segment fell from 22.58% to 20.01%. PBIT margin of Africa (including strength of Nature) segment rose from 3.47% to 4.01%. PBIT margin of Others segment fell from 11.87% to 5.85%. Overall PBIT margin fell from 18.40% to 17.92%.

Operating profit margin has declined from 19.52% to 18.25%, leading to 1.44% rise in operating profit to Rs 2,430.46 crore. Raw material cost as a % of total sales (net of stock adjustments) increased from 46.87% to 47.20%. Purchase of finished goods cost fell from 2.87% to 2.33%. Employee cost decreased from 8.95% to 8.48%. Other expenses rose from 21.89% to 23.44%. Selling and administration expenses rose from 6.09% to 7.52%. Loss on forex transaction rose from 0.78% to 0.83%.

Other income rose 87.73% to Rs 168.41 crore. PBIDT rose 4.55% to Rs 2598.87 crore. Provision for interest rose 59.53% to Rs 175.74 crore. Loan funds declined from Rs 1,704.34 crore as of 31 March 2022 to Rs 1,129.58 crore as of 31 March 2023. Inventories declined from Rs 2,129.85 crore as of 31 March 2022 to Rs 1,537.15 crore as of 31 March 2023. Sundry debtors were higher at Rs 1,245.28 crore as of 31 March 2023 compared to Rs 1,116.32 crore as of 31 March 2022. Cash and bank balance declined from Rs 1,107.77 crore as of 31 March 2022 to Rs 390.72 crore as of 31 March 2023. Investments rose to Rs 3,028.98 crore as of 31 March 2023 from Rs 1,015.43 crore as of 31 March 2022 .

PBDT rose 2% to Rs 2423.13 crore. Provision for depreciation rose 12.08% to Rs 236.29 crore. Fixed assets declined from Rs 3,958.95 crore as of 31 March 2022 to Rs 1,575.68 crore as of 31 March 2023. Intangible assets increased from Rs 5,376.79 crore to Rs 8,403.40 crore.

Profit before tax grew 1.02% to Rs 2,186.84 crore. Share of profit/loss were nil in both the periods. Extraordinary items were decreased to Rs -54.11 crore. Provision for tax was expense of Rs 430.27 crore, compared to Rs 371.87 crore. Effective tax rate was 20.17% compared to 17.25%.

Minority interest was nil in both the periods. Net profit attributable to owners of the company decreased 4.54% to Rs 1,702.46 crore.

Equity capital increased from Rs 102.26 crore as of 31 March 2022 to Rs 102.27 crore as of 31 March 2023. Per share face Value remained same at Rs 1.00.

Promoters’ stake was 63.21% as of 31 March 2023 ,compared to 63.22% as of 31 March 2022 . Promoters pledged stake was 0.66% as of 31 March 2023 ,compared to 0.66% as of 31 March 2022 .

Cash flow from operating activities increased to Rs 2,150.65 crore for year ended March 2023 from Rs 1,450.57 crore for year ended March 2022. Cash flow used in acquiring fixed assets during the year ended March 2023 stood at Rs 227.40 crore, compared to Rs 276.52 crore during the year ended March 2022.

Other Highlights

In Q1 FY24, India business sales grew by 9% year-on-year led by volume growth of 12%. Indonesia sales grew by 20% in INR and 15% in constant currency terms, year-on-year. Africa, USA and Middle East sales grew by 9% in INR and 16% in constant currency terms on YoY basis. Latin America & SAARC sales up by 18% in INR and grew by 79% in constant currency terms on YoY basis.

In Q1 FY24, Homecare increased by 14% and personal care up by 2% on YoY basis.

Board approved capital expenditure of Rs 900 crore for setting up a new manufacturing site at Tamil Nadu and Madya Pradesh. To cater to the growing demand of the customers, company plans to add approximately 20% capacity in Home Care and Personal Care categories. The manufacturing sites are expected to come on stream approximately in 18-36 months.

Management Comments :
Sudhir Sitapati, Managing Director and CEO, GCPL, said: “We started the year on a positive note and achieved healthy volume-led sales growth. In organic terms, our consolidated sales increased by 9% year-on-year driven by healthy volume growth of 8%. Sales in constant currency terms increased by 13%. In India, we continued to stay course on our strategy of volume-driven category development and delivered double-digit volume growth of 10%. This performance was broad based with Home Care delivering double-digit volume growth and Personal Care in mid-single digits. Our value growth was lower than volume growth as we passed on the benefits of lower input costs to our consumers. In Indonesia, our performance has continued to improve aided by structural improvements implemented last year, with a 15% growth in constant currency terms. Africa, USA and the Middle East continue to grow in double-digits in constant currency terms. Our quality of profits has been improving consistently over the last few quarters with reported Consolidated Gross Margin seeing sharp improvement of 730 bps year-on-year and 80 bps quarter-on[1]

quarter. Our EBITDA Margin, too, improved by 270 bps year-on-year along with continued working media investments which increased by 79% year-on-year. We remain focused on driving volume-led growth along with healthy investments in our brands and improvement in profitability. We continue to have a strong balance sheet. We are on track in our journey to reduce wasted cost and are deploying this to drive profitable and sustainable volume growth across our portfolio through category development. We remain committed to our purpose of bringing the goodness of health and beauty to consumers in emerging markets.”

Godrej Consumer Products : Consolidated Results

	Quarter ended			Year ended
Particulars	202306	202206	Var.(%)	202303	202203	Var.(%)
Net Sales (including other operating income)	3,448.91	3,124.97	10.37	13,315.97	12,276.50	8.47
OPM (%)	18.64	16.67	197 bps	18.25	19.52	-126 bps
OP	642.84	520.80	23.43	2,430.46	2,396.01	1.44
Other Inc.	69.11	27.52	151.13	168.41	89.71	87.73
PBIDT	711.95	548.32	29.84	2,598.87	2,485.72	4.55
Interest	74.00	35.06	111.07	175.74	110.16	59.53
PBDT	637.95	513.26	24.29	2,423.13	2,375.56	2.00
Depreciation	76.29	57.06	33.70	236.29	210.83	12.08
PBT	561.66	456.20	23.12	2186.84	2164.73	1.02
Share of Profit/(Loss) from Associates	0	0	-	0	0.28	-
PBT before EO	561.66	456.2	23.12	2186.84	2165.01	1.01
EO Income	-81.78	-1.83	-4,368.85	-54.11	-9.75	-454.97
PBT after EO	479.88	454.37	5.61	2132.73	2155.26	-1.05
Taxation	161.06	109.25	47.42	430.27	371.87	15.70
PAT	318.82	345.12	-7.62	1702.46	1783.39	-4.54
Minority Interest (MI)	0	0	-	0	0	-
Net profit	318.82	345.12	-7.62	1702.46	1783.39	-4.54
P/(L) from discontinued operations net of tax	0	0	-	0	0	-
Net profit after discontinued operations	318.82	345.12	-7.62	1702.46	1783.39	-4.54
EPS (Rs)*	3.65	3.39	7.69	17.07	17.52	-2.56

* EPS is on current equity of Rs 102.28 crore, Face value of Rs 1, Excluding extraordinary items.
# EPS is not annualised
bps : Basis points
EO : Extraordinary items
Figures in Rs crore
Source: Capitaline Corporate Database

Godrej Consumer Products : Consolidated Segment Results

	Quarter ended				Year ended
	% of (Total)	202306	202206	Var.(%)	% of (Total)	202303	202203	Var.(%)
Sales
India	57.54	2,005.48	1,849.41	8.44	56.99	7,667.16	6,951.56	10.29
Indonesia	12.93	450.69	376.51	19.70	12.29	1,653.03	1,705.19	-3.06
Africa	24.35	848.57	778.87	8.95	25.38	3,414.67	3,049.74	11.97
Others	5.19	180.79	154.05	17.36	5.34	717.83	750.77	-4.39
Total Reported Sales	100.00	3,485.53	3,158.84	10.34	100.00	13,452.69	12,457.26	7.99
Less: Inter segment revenues		36.62	33.87	8.12		136.72	180.76	-24.36
Net Sales	100.00	3,448.91	3,124.97	10.37	100.00	13,315.97	12,276.50	8.47
PBIT
India	80.71	633.60	410.12	54.49	78.85	1,900.56	1,712.00	11.01
Indonesia	12.67	99.46	57.58	72.73	13.72	330.75	385.05	-14.10
Africa	5.61	44.01	24.58	79.05	5.68	136.88	105.68	29.52
Others	1.01	7.94	2.50	217.60	1.74	42.01	89.10	-52.85
Total PBIT	100.00	785.01	494.78	58.66	100.00	2,410.20	2,291.83	5.16
Less : Interest		74.00	35.06	111.07		175.74	110.16	59.53
Add: Other un-allcoable		-231.13	-5.35	-4,220.19		-101.73	-26.41	-285.20
PBIT Margin(%)
India		31.59	22.18	941.77		24.79	24.63	16.08
Indonesia		22.07	15.29	677.53		20.01	22.58	-257.24
Africa		5.19	3.16	203.05		4.01	3.47	54.34
Others		4.39	1.62	276.90		5.85	11.87	-601.55
PBT	100.00	479.88	454.37	5.61	100.00	2,132.73	2,155.26	-1.05

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