Quarter consolidated results

For the quarter ended March 2019, consolidated net sales fell 3% to Rs 2452.58 crore.

OPM stayed at 23.6% which saw OP fall 3% to Rs 578.16 crore.

Other income increased 1% to Rs 29.14 crore and interest cost increased 36% to Rs 57.48 crore. As depreciation went up 6% to Rs 42.59 crore, PBT decreased 7% to Rs 507.23 crore.

EO loss was Rs 6.66 crore against gains of Rs 193.81 crore. Thus PBT after EO fell 32% to Rs 500.57 crore.

Tax fell 12% to Rs 98.78 crore after which PAT fell 36% to Rs 401.79 crore.

Deferred tax write back was Rs 533.45 crore against provision of Rs 7.78 crore. Thus net profit grew 52% to Rs 935.24 crore.

FY 2019 consolidated results

In FY 2019, consolidated net sales fell 4% to Rs 10314.34 crore.

OPM fell 30 bps to 20.5% after which saw OP grew 2% to Rs 2118.24 crore.

Other income increased 1% to Rs 108.76 crore and interest cost increased 40% to Rs 224.25 crore. As Depreciation went up 9% to Rs 169.98 crore, PBT decreased 1% to Rs 1832.77 crore.

EO gains grew Rs 41% to Rs 252.56 crore. Thus PBT after EO grew 2% to Rs 2085.33 crore.

During the year to date, the company completed divestment of its UK business, consequently gain of Rs 76.44 crore has been reported under exceptional items. Also, an amount of Rs 194.15 crore being gain on account of change in the earnout liability of a subsidiary has been reported under exceptional items for the year ended March 2019. These have been offset by certain restructuring costs incurred of Rs 18.03 crore. For the year ended March 2018, exceptional items included an amount of Rs 194.99 crore being gain on account of change in earnout liability of a subsidiary.

Tax grew 4% to Rs 417.90 crore after which PAT grew 2% to Rs 1667.43 crore.

Deferred tax write back was Rs 674.10 crore against provision of Rs 2.24 crore. Thus net profit grew 43% to Rs 2341.53 crore.

Management comments

GCPL Executive Chairperson Nisaba Godrej said, "We have had a good start to fiscal year 2019 with profitable, ahead of the market growth across most geographies and categories."

"In our international business, we saw a recovery in Indonesia, while our performance in Africa was relatively soft," she added.

On the outlook, Godrej said consumer demand is improving and the company expects this recovery to sustain going forward.

"In India, while we expect both urban and rural growth to improve, rural growth will outpace urban growth on the back of remonetisation, the settling down of the GST implementation and the government's efforts to stimulate the rural economy," she said.

Godrej said GCPL is accelerating the pace of innovation with differentiated and unique products and FY19 will be its most active in terms of new launches.

"Alongside this, we continue to manage our costs prudently and make competitive brand investments for sustainable future growth," she said.

Valuation

The stock trades at Rs 642.