Capitaline

Results 01-Feb-23

Analysis

Godrej Consumer Products

Sales up 8.97%

For the quarter ending Dec 2022, consolidated Net sales (including other operating income) of Godrej Consumer Products has increased 8.97% to Rs 3598.92 crore compared to quarter ended Dec 2021. Sales of India segment has gone up 10.58% to Rs 2,009.80 crore (accounting for 15.91% of total sales). Sales of Indonesia segment has gone down 3.10% to Rs 433.32 crore (accounting for 3.43% of total sales). Sales of Africa segment rose 1,031.76% to Rs 10,007.05 crore (accounting for 79.21% of total sales). Sales of Others segment has gone down 8.72% to Rs 182.76 crore (accounting for 1.45% of total sales). Inter-segment sales came down from Rs 46.47 crore to Rs 34.01 crore.

Profit before interest, tax and other unallocable items (PBIT) has jumped 14.04% to Rs 730.23 crore. PBIT of India segment rose 23.37% to Rs 560.44 crore (accounting for 76.75% of total PBIT). PBIT of Indonesia segment rose 3.16% to Rs 94.75 crore (accounting for 12.98% of total PBIT). PBIT of Africa segment fell 15.15% to Rs 62.11 crore (accounting for 8.51% of total PBIT). PBIT of Others segment fell 38.40% to Rs 12.93 crore (accounting for 1.77% of total PBIT).

PBIT margin of India segment rose from 24.99% to 27.89%. PBIT margin of Indonesia segment rose from 20.54% to 21.87%. PBIT margin of Africa segment fell from 8.28% to 0.62%. PBIT margin of Others segment fell from 10.48% to 7.07%. Overall PBIT margin fell from 19.12% to 5.78%.

Operating profit margin has declined from 20.23% to 20.19%, leading to 8.78% rise in operating profit to Rs 726.64 crore. Raw material cost as a % of total sales (net of stock adjustments) decreased from 44.80% to 42.87%. Purchase of finished goods cost fell from 2.74% to 2.40%. Employee cost decreased from 8.87% to 8.67%. Other expenses rose from 22.65% to 24.46%. Selling and administration expenses rose from 7.17% to 8.20%.

Other income rose 92.55% to Rs 43.15 crore. PBIDT rose 11.50% to Rs 769.79 crore. Provision for interest rose 56.24% to Rs 39.92 crore.

PBDT rose 9.78% to Rs 729.87 crore. Provision for depreciation rose 5.82% to Rs 57.32 crore.

Profit before tax grew 10.13% to Rs 672.55 crore. Share of profit/loss were nil in both the periods. Provision for tax was expense of Rs 118.77 crore, compared to Rs 97.15 crore. Effective tax rate was 17.86% compared to 15.55%.

Minority interest was nil in both the periods. Net profit attributable to owners of the company increased 3.55% to Rs 546.34 crore.

Promoters’ stake was 53.33% as of 31 December 2022 ,compared to 63.22% as of 31 December 2021 .

For year-to-date (YTD) results analysis.

Net sales (including other operating income) of Godrej Consumer Products has increased 8.07% to Rs 10115.81 crore. Sales of India segment has gone up 9.93% to Rs 5,844.24 crore (accounting for 57.19% of total sales). Sales of Indonesia segment has gone down 6.53% to Rs 1,218.49 crore (accounting for 11.92% of total sales). Sales of Africa segment rose 13.65% to Rs 2,644.58 crore (accounting for 25.88% of total sales). Sales of Others segment has gone down 4.83% to Rs 511.21 crore (accounting for 5.00% of total sales). Inter-segment sales came down from Rs 123.28 crore to Rs 102.71 crore.

Profit before interest, tax and other unallocable items (PBIT) has slumped 4.87% to Rs 1,761.15 crore. PBIT of India segment rose 5.62% to Rs 1,404.51 crore (accounting for 79.75% of total PBIT). PBIT of Indonesia segment fell 24.56% to Rs 226.02 crore (accounting for 12.83% of total PBIT). PBIT of Africa segment fell 29.40% to Rs 107.17 crore (accounting for 6.09% of total PBIT). PBIT of Others segment fell 66.52% to Rs 23.45 crore (accounting for 1.33% of total PBIT).

PBIT margin of India segment fell from 25.01% to 24.03%. PBIT margin of Indonesia segment fell from 22.98% to 18.55%. PBIT margin of Africa segment fell from 6.52% to 4.05%. PBIT margin of Others segment fell from 13.04% to 4.59%. Overall PBIT margin fell from 19.52% to 17.23%.

Operating profit margin has declined from 20.59% to 17.69%, leading to 7.16% decline in operating profit to Rs 1,789.55 crore. Raw material cost as a % of total sales (net of stock adjustments) increased from 46.18% to 47.99%. Purchase of finished goods cost fell from 2.99% to 2.56%. Employee cost decreased from 8.87% to 8.15%. Other expenses rose from 21.37% to 23.31%. Selling and administration expenses rose from 6.04% to 7.65%.

Other income rose 67.61% to Rs 110.54 crore. PBIDT fell 4.68% to Rs 1900.09 crore. Provision for interest rose 59.31% to Rs 123.23 crore.

PBDT fell 7.27% to Rs 1776.86 crore. Provision for depreciation rose 7.56% to Rs 167.7 crore.

Profit before tax down 8.58% to Rs 1,609.16 crore. Share of profit/loss were nil in both the periods. Provision for tax was expense of Rs 326.9 crore, compared to Rs 351.11 crore. Effective tax rate was 20.73% compared to 19.82%.

Minority interest was nil in both the periods. Net profit attributable to owners of the company decreased 11.96% to Rs 1,250.32 crore.

Promoters’ stake was 53.33% as of 31 December 2022 ,compared to 63.22% as of 31 December 2021 .

Full year results analysis.

Net sales (including other operating income) of Godrej Consumer Products has increased 11.31% to Rs 12276.5 crore. Sales of India segment has gone up 11.15% to Rs 6,951.56 crore (accounting for 55.80% of total sales). Sales of Indonesia segment has gone down 3.66% to Rs 1,705.19 crore (accounting for 13.69% of total sales). Sales of Africa (including strength of Nature) segment rose 22.06% to Rs 3,049.74 crore (accounting for 24.48% of total sales). Sales of Others segment has gone up 12.74% to Rs 750.77 crore (accounting for 6.03% of total sales). Inter-segment sales rose Rs 160.19 crore to Rs 180.76 crore.

Profit before interest, tax and other unallocable items (PBIT) has slumped 0.06% to Rs 2,291.83 crore. PBIT of India segment rose 4.77% to Rs 1,712.00 crore (accounting for 74.70% of total PBIT). PBIT of Indonesia segment fell 19.93% to Rs 385.05 crore (accounting for 16.80% of total PBIT). PBIT of Africa (including strength of Nature) segment fell 0.79% to Rs 105.68 crore (accounting for 4.61% of total PBIT). PBIT of Others segment rose 24.48% to Rs 89.10 crore (accounting for 3.89% of total PBIT).

PBIT margin of India segment fell from 26.13% to 24.63%. PBIT margin of Indonesia segment fell from 27.17% to 22.58%. PBIT margin of Africa (including strength of Nature) segment fell from 4.26% to 3.47%. PBIT margin of Others segment rose from 10.75% to 11.87%. Overall PBIT margin fell from 20.49% to 18.40%.

Operating profit margin has declined from 21.66% to 19.52%, leading to 0.32% rise in operating profit to Rs 2,396.01 crore. Raw material cost as a % of total sales (net of stock adjustments) increased from 41.61% to 46.87%. Purchase of finished goods cost fell from 3.30% to 2.87%. Employee cost decreased from 10.15% to 8.95%. Other expenses fell from 23.37% to 21.89%. Selling and administration expenses fell from 6.62% to 6.09%.

Other income rose 33.76% to Rs 89.71 crore. PBIDT rose 1.24% to Rs 2485.72 crore. Provision for interest fell 13.01% to Rs 110.16 crore. Loan funds declined from Rs 1,863.97 crore as of 31 March 2021 to Rs 1,704.34 crore as of 31 March 2022. Inventories rose to Rs 2,129.85 crore as of 31 March 2022 from Rs 1,716.25 crore as of 31 March 2021. Sundry debtors were higher at Rs 1,116.32 crore as of 31 March 2022 compared to Rs 1,004.50 crore as of 31 March 2021. Cash and bank balance rose to Rs 1,107.77 crore as of 31 March 2022 from Rs 672.21 crore as of 31 March 2021. Investments rose to Rs 1,015.43 crore as of 31 March 2022 from Rs 679.10 crore as of 31 March 2021 .

PBDT rose 2.01% to Rs 2375.56 crore. Provision for depreciation rose 3.42% to Rs 210.83 crore. Fixed assets increased to Rs 3,958.95 crore as of 31 March 2022 from Rs 3,832.35 crore as of 31 March 2021. Intangible assets increased from Rs 5,129.85 crore to Rs 5,376.79 crore.

Profit before tax grew 1.88% to Rs 2,164.73 crore. Extraordinary items were increased to Rs -9.75 crore. Provision for tax was expense of Rs 371.87 crore, compared to Rs 359.54 crore. Effective tax rate was 17.25% compared to 17.28%.

Minority interest was nil in both the periods. Net profit attributable to owners of the company increased 3.64% to Rs 1,783.39 crore.

Equity capital increased from Rs 102.25 crore as of 31 March 2021 to Rs 102.26 crore as of 31 March 2022. Per share face Value remained same at Rs 1.00.

Promoters’ stake was 63.22% as of 31 March 2022 ,compared to 63.23% as of 31 March 2021 . Promoters pledged stake was 0.66% as of 31 March 2022 ,compared to 0.66% as of 31 March 2021 .

Cash flow from operating activities decreased to Rs 1,450.57 crore for year ended March 2022 from Rs 2,029.63 crore for year ended March 2021. Cash flow used in acquiring fixed assets during the year ended March 2022 stood at Rs 276.52 crore, compared to Rs 163.86 crore during the year ended March 2021.

Other Highlights

In Q3 FY23, Homecare increased by 10%, personal care up by 14% and Unbranded and Exports down 9% on YoY basis.

During the quarter India sales grew by 11% and volume grew by 3% on YoY basis.

In Q3 FY23, (1) Indonesia sales declined 3% in Constant Currency terms, (2) Africa, USA & Middle East grew 23% and (3) Latin America & SAARC grew by 47% on YoY basis.

Management Comments :
Sudhir Sitapati, Managing Director and CEO, GCPL, said: We delivered an all-round performance in 3Q FY 2023. Overall sales grew by 9% and we witnessed sharp sequential uplift in underlying volume growth. Consolidated volume grew by 1%. Our overall quality of profits has been healthy with double-digit EBITDA growth of 10%. Gross margins expanded by 330 bps quarter-on-quarter and 50 bps year-on-year. Continued upfront working media investments grew by 28%. PAT, without exceptional items and one-offs, grew by 13%. We had a broad-based growth across geographies. India delivered double-digit sales growth of 11%. Our Africa, USA and Middle East business continued its strong growth trajectory, growing at 14% in INR and 23% in constant currency terms. Performance in our Indonesian business is gradually recovering, declining by 3% in INR and constant currency terms. Indonesia growth ex-Hygiene category was 2% in constant currency. From a category perspective, in India, we saw broad-based double-digit growth; Personal Care grew by 14% and Home Care grew by 10%. With commodity pressures abating, we expect gradual recovery in consumption, expansion in gross margins, upfront marketing investments with a significant focus on reducing controllable costs and improvement in profitability in the coming quarters. We continue to have a healthy balance sheet and are also net cash positive. We are on track in our journey to reduce inventory and 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 to Date			Year ended
Particulars	202212	202112	Var.(%)	202212	202112	Var.(%)	202203	202103	Var.(%)
Net Sales (including other operating income)	3,598.92	3,302.58	8.97	10,115.81	9,360.68	8.07	12,276.50	11,028.62	11.31
OPM (%)	20.19	20.23	-4 bps	17.69	20.59	-290 bps	19.52	21.66	-214 bps
OP	726.64	667.98	8.78	1,789.55	1,927.53	-7.16	2,396.01	2,388.25	0.32
Other Inc.	43.15	22.41	92.55	110.54	65.95	67.61	89.71	67.07	33.76
PBIDT	769.79	690.39	11.50	1,900.09	1,993.48	-4.68	2,485.72	2,455.32	1.24
Interest	39.92	25.55	56.24	123.23	77.35	59.31	110.16	126.63	-13.01
PBDT	729.87	664.84	9.78	1,776.86	1,916.13	-7.27	2,375.56	2,328.69	2.01
Depreciation	57.32	54.17	5.82	167.7	155.92	7.56	210.83	203.85	3.42
PBT	672.55	610.67	10.13	1609.16	1760.21	-8.58	2164.73	2124.84	1.88
Share of Profit/(Loss) from Associates	0	0.31	-	0	0.27	-	0.28	-0.01	LP
PBT before EO	672.55	610.98	10.08	1609.16	1760.48	-8.60	2165.01	2124.83	1.89
EO Income	-7.44	13.77	PL	-31.94	10.78	PL	-9.75	-44.47	78.08
PBT after EO	665.11	624.75	6.46	1577.22	1771.26	-10.95	2155.26	2080.36	3.60
Taxation	118.77	97.15	22.25	326.9	351.11	-6.90	371.87	359.54	3.43
PAT	546.34	527.6	3.55	1250.32	1420.15	-11.96	1783.39	1720.82	3.64
Minority Interest (MI)	0	0	-	0	0	-	0	0	-
Net profit	546.34	527.6	3.55	1250.32	1420.15	-11.96	1783.39	1720.82	3.64
P/(L) from discontinued operations net of tax	0	0	-	0	0	-	0	0	-
Net profit after discontinued operations	546.34	527.6	3.55	1250.32	1420.15	-11.96	1783.39	1720.82	3.64
EPS (Rs)*	5.40	5.05	7.07	12.47	13.80	-9.63	17.52	17.19	1.93

* EPS is on current equity of Rs 102.27 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 to Date				Year ended
	% of (Total)	202212	202112	Var.(%)	% of (Total)	202212	202112	Var.(%)	% of (Total)	202203	202103	Var.(%)
Sales
India	15.91	2,009.80	1,817.43	10.58	57.19	5,844.24	5,316.22	9.93	55.80	6,951.56	6,254.33	11.15
Indonesia	3.43	433.32	447.19	-3.10	11.92	1,218.49	1,303.59	-6.53	13.69	1,705.19	1,770.02	-3.66
Africa	79.21	10,007.05	884.20	1,031.76	25.88	2,644.58	2,326.97	13.65	24.48	3,049.74	2,498.53	22.06
Others	1.45	182.76	200.23	-8.72	5.00	511.21	537.18	-4.83	6.03	750.77	665.93	12.74
Total Reported Sales	100.00	12,632.93	3,349.05	277.21	100.00	10,218.52	9,483.96	7.75	100.00	12,457.26	11,188.81	11.34
Less: Inter segment revenues		34.01	46.47	-26.81		102.71	123.28	-16.69		180.76	160.19	12.84
Net Sales	100.00	12,598.92	3,302.58	281.49	100.00	10,115.81	9,360.68	8.07	100.00	12,276.50	11,028.62	11.31
PBIT
India	76.75	560.44	454.26	23.37	79.75	1,404.51	1,329.83	5.62	74.70	1,712.00	1,634.12	4.77
Indonesia	12.98	94.75	91.85	3.16	12.83	226.02	299.62	-24.56	16.80	385.05	480.92	-19.93
Africa	8.51	62.11	73.20	-15.15	6.09	107.17	151.79	-29.40	4.61	105.68	106.52	-0.79
Others	1.77	12.93	20.99	-38.40	1.33	23.45	70.05	-66.52	3.89	89.10	71.58	24.48
Total PBIT	100.00	730.23	640.30	14.04	100.00	1,761.15	1,851.29	-4.87	100.00	2,291.83	2,293.14	-0.06
Less : Interest		39.92	25.55	56.24		123.23	77.35	59.31		110.16	126.63	-13.01
Add: Other un-allcoable		-25.20	10.00	PL		-60.70	-2.68	-2,164.93		-26.41	-86.15	69.34
PBIT Margin(%)
India		27.89	24.99	289.07		24.03	25.01	-98.22		24.63	26.13	-150.03
Indonesia		21.87	20.54	132.67		18.55	22.98	-443.50		22.58	27.17	-458.93
Africa		0.62	8.28	-765.80		4.05	6.52	-247.06		3.47	4.26	-79.81
Others		7.07	10.48	-340.81		4.59	13.04	-845.32		11.87	10.75	111.89
PBT	100.00	665.11	624.75	6.46	100.00	1,577.22	1,771.26	-10.95	100.00	2,155.26	2,080.36	3.60

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