FMCG major Godrej Consumer has noted that operating conditions in the first quarter have remained soft, but despite the challenging environment, the India business has clocked high single-digit organic volume and mid-single digit value growth.
Overall, Godrej Consumer's reported growth will be double-digit in volume and high-single digit in value terms, the company said in its business update released on July 8. At a consolidated level, GCPL expects flattish INR sales, double-digit constant currency sales growth and double-digit EBITDA (reported) growth.
"The growth was broad-based across both Home Care and Personal Care. Demand in Household Insecticides had been soft for earlier parts of the quarter due to extreme heatwaves across the country," the company said in a filing with the bourses.
"Park Avenue and KamaSutra brands are performing well post portfolio simplification actions and are in-line with our full year growth ambition," it added.
Godrej's Indonesia business delivered a strong performance with high-single digit volume growth and double-digit constant currency sales growth. However, the Indonesian currency has seen high depreciation leading to lower growth in INR terms.
On the other hand, the GAUM (Godrej Africa, USA, and Middle East) organic business is expected to see double-digit volume decline largely led by West Africa due to a high base in the same quarter of the previous fiscal and some tough pricing decisions in Nigeria.
The currency in Nigeria continues to negatively impact Godrej Consumer's INR sales performance. Despite this, the company has grown EBITDA (reported) in INR terms in strong double-digits.
International brokerage Morgan Stanley retained its equal-weight on Godrej Consumer, maintaining its target price of Rs 1,231 per share. This indicated a downside of 13.6 percent from the previous close.
Over the past year, shares of the firm have gained around 35 percent in trade as against a 25 percent rise in the frontline Nifty 50 index.
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