GCPL sees a 59.09% YoY uptick in ad spends in Q1

Indian FMCG giant Godrej Consumer Products Limited (GCPL) has unveiled its financial results for the quarter concluded on June 30, 2023.

During the initial quarter of this fiscal year, the company significantly elevated its advertising outlay, experiencing a noteworthy YoY uptick of 59.09%. This translated to an investment of Rs 320.39 crore, a marked increase compared to the Rs 201.39 crore allocated during the corresponding period in the previous year.

However, the company's consolidated net profit for the June quarter settled at Rs 318.82 crore, indicating a 7.62% YoY decline in contrast to the impressive Rs 345.12 crore achieved by the FMCG behemoth in Q1FY23. The total revenue in the first quarter stood at Rs 3,448.91 crore, 10.36% up from Rs 3,124.97 crore in the year-ago period, the company said in an exchange filing. 

The company's board granted the green light for a capital expenditure totaling Rs 900 crore, aimed at establishing fresh manufacturing facilities in both Tamil Nadu and Madhya Pradesh.

Sudhir Sitapati, the MD and CEO of GCPL, shares, "In India, we continued to stay course on our strategy of volume-driven category development and delivered double-digit volume growth of 10%. This performance was broad based with Home Care delivering double-digit volume growth and Personal Care in mid-single digits. Our value growth was lower than volume growth as we passed on the benefits of lower input costs to our consumers."

India's sales during the opening quarter of FY 2024 saw a 9% increase, achieving a figure of Rs 1,971 crore, bolstered by a resilient 12% expansion in volume. 

Category Review

Home Care grew by 14%. Performance in Household Insecticides was robust with double-digit volume and value growth. Performance was led by strong growth in premium formats.  

Air Fresheners has been consistently delivering strong double-digit growth. The company continues to gain market share and enjoy market leadership. Performance was broad based with strong growth in Aer Pocket, Aer Matic and the Car Range. 

Personal Care grew by 2%. Personal Wash maintained its growth momentum, delivering high-single-digit volume growth. Value grew in low-single digits as the company passed on the benefit of lower input cost to consumers. It continues to grow ahead of the category on the back of effective media campaigns and micro marketing initiatives. 

Hair Colour grew in mid-single digits, off a high base with 2-year CAGR in teens. Growth was led by steady performance across formats. 

Sitapati added, "Our quality of profits has been improving consistently over the last few quarters with reported Consolidated Gross Margin seeing sharp improvement of 730 bps year-on-year and 80 bps quarter-on quarter. Our EBITDA Margin, too, improved by 270 bps year-on-year along with continued working media investments which increased by 79% year-on-year."