Godrej Consumer Q2 net falls 2.6% on higher tax, forex loss

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Godrej Consumer Q2 net falls 2.6% on higher tax, forex loss

Godrej Consumer Products’ second quarter consolidated net profit declined 2.6% year-on-year to Rs 127.71 crore due to high tax expenses and increase in interest and financial charges.

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Godrej Consumer Products ' second quarter consolidated net profit declined 2.6% year-on-year to Rs 127.71 crore as higher tax expense and a foreign exchange loss offset strong sales growth.

The FMCG company, however, saw brisk sales; consolidated net sales rose 23% from a year ago to Rs 1,186 crore.

Analysts on average had expected GCPL's net profit at Rs 140 crore on revenue of Rs 1,130 crore, according to a CNBC-TV18 poll.

Godrej Consumer shares fell following the results announcement and at 12:40 hrs were trading down 1% at Rs 405.70 on NSE.

The company said it was one of the strongest sales growth quarters for the company, helped by 24% growth in domestic business with healthy growth across the categories of soaps, household insecticide and hair colours, and 19% comparable International business growth led by Indonesia and Latin America.

However, tax expenses rose 28% year-on-year to Rs 43.18 crore in July-September. It also had a foreign exchange loss of Rs 16.57 crore, compared with a gain of Rs 9.04 crore in the year ago quarter.

Its raw material costs in the quarter were up 31% from a year ago at Rs 501.67 crore.

GCPL's EBITDA margin in the second quarter rose 320 bps sequentially to 18.1% in the second quarter.

During the quarter, Godrej completed the acquisition of 51% stake in South Africa's Darling Group.

GCPL Chairiman Adi Godrej said that macroeconomic environment remained challenging, but he was confident of the opportunities for the company in the domestic as well as overseas markets.

"We will continue to pursue a prudent but aggressive growth strategy through a blend of organic and inorganic initiatives," he said.

Nachiket Kelkar
nachiket.kelkar@network18online.com