Q2 Results: Godrej Consumer Willing To Sacrifice Margins To Drive Volume Growth
The Godrej-group firm plans to focus on new launches to beat the “persisting” consumption slowdown.
Godrej Consumer Products Ltd. would focus on higher volume growth for its domestic business even if it involves “taking a hit on its operating margin”, its Managing Director & Chief Executive Officer Vivek Gambhir said.
“We’re already sitting on very attractive margins, so we’re comfortable even if we need to invest for a couple of quarters by putting pressure on margin,” Gambhir told BloombergQuint in an interaction.
The company now plans to focus on new launches to beat the “persisting” consumption slowdown in the macro environment. “You’ll see a lot of launches across the five categories we operate in.”
That comes as the Indian economy grew at its slowest pace in six years in the quarter ended June, which reflected in private final consumption expenditure as Indians cut spending on everything from biscuits and shampoos to appliances and cars. The government countered the slowdown with a slew of measures, including corporate tax cuts, to revive the economy.
Q2 Results (YoY)
- Revenue declined 1 percent to Rs 2,630 crore.
- Net profit fell 28 percent to Rs 414 crore.
- Ebitda rose 17.7 percent to Rs 571 crore.
- Ebitda margin at 21.7 percent.
- Domestic volume growth at 7 percent—highest in the last five quarters.
Shares of the Godrej-group company rose 3 percent intraday compared with a 0.2 percent gain in the NSE Nifty Index.
Godrej Consumer On How Its Volume Growth Hit A Five-Quarter High: