Godrej Consumer July-September Profit Falls 6% on Higher Costs, GST-led Trade Disruption

Godrej Consumer Products Ltd. reported a mid-single-digit fall in its September quarter profit as expenses grew faster than sales due to higher costs related to stock-in-trade purchases, advertising, and other expenses. The company’s performance was also affected by the recent cut in goods and services tax rates, which caused temporary trade disruptions, particularly in soaps and hair colour.

The fast-moving consumer goods company posted a consolidated net profit of ₹4.59 billion for the quarter, down more than 6% on year but slightly higher sequentially. Consolidated revenue rose a little over 4% on both year-on-year and sequential basis to ₹38.25 billion.

Total expenses increased more than 6% on year to ₹32.33 billion, led by a sharp rise in stock-in-trade purchases, higher other expenses, and advertising costs. Purchases of stock-in-trade more than doubled to ₹4.65 billion from ₹2.20 billion a year ago. Advertising and publicity expenses rose just over 3% to ₹3.76 billion, while other expenses were up around 2% to ₹6.14 billion. Raw material costs fell slightly to ₹15.24 billion.

Consolidated earnings before interest, taxes, depreciation, and amortisation fell 3% on year. The EBITDA margin for the quarter was 19.3%, compared with 19.2% in the previous quarter.

Despite GST-related headwinds, the India business excluding soaps delivered double-digit underlying volume growth. Revenue from India grew 4% on year to ₹23.62 billion, with total sales volume from the region up 3%. EBITDA from the region declined 8% on year to ₹5.12 billion in July–September.

Under the India business, revenue from the home care segment rose 6% on year to ₹10.80 billion, driven by strong performance in air fresheners and fabric care, while personal care revenue fell 2% to ₹11.51 billion due to GST-related adjustments. The company said the GST rate cut temporarily impacted demand but should support long-term growth, as nearly one-third of its portfolio now benefits from a reduced 5% rate.

In its international operations, sales from the Indonesia business fell 7% on year in both rupee and constant currency terms due to macroeconomic pressures and pricing issues, though volumes grew 2%. Meanwhile, the Africa, US, and West Asia business saw 25% on-year sales growth in rupee terms and 20% EBITDA growth, supported by strong demand for hair fashion products and air fresheners.

For April–September, consolidated net profit declined over 3% on year to ₹9.12 billion, while revenue rose nearly 7% to ₹74.87 billion. The board declared an interim dividend of ₹5 per share for 2025-2026 and set November. 7 as the record date.