Godrej Consumer Products Ltd (GODREJCP) Q2FY27 Concall Transcript - Sep-2026 Qtr
Moderator: Ladies and gentlemen, good day, and welcome to the Godrej Consumer Products Limited Q2 FY '27 Earnings Conference Call. As a reminder, all participant lines will be in the listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during this conference call, please signal an operator by pressing "*" then "0" on your touchtone phone. Please note that this conference is being recorded. I now hand the conference call over to Mr. Vishal Kedia. Thank you, and over to you, sir.
Vishal Kedia (Godrej Consumer Products Ltd): Good evening to all. I welcome you to the conference call for GCPL. We have with us Mr. Aasif Malbari, MD and CEO, and myself Vishal, Interim CFO for the company. We will start with opening remarks from Aasif, post which we will move to the Q&A segment. I hand over the call to Aasif now.
Aasif Malbari (Godrej Consumer Products Ltd): Good evening, everybody. FY '27 has been a quarter of strong, broad-based performance for Godrej Consumer Products Limited, fully aligned with our expectations and strategic priorities. We delivered strong, broad-based underlying volume growth across India, Indonesia, and Africa, despite subdued monsoon conditions in India while being supported by tailwinds in Indonesia. At a consolidated level, revenues grew 19% year-on-year, 15% in constant currency terms, with underlying volume growth of 8%. EBITDA grew 12%. Net profit grew 14% to 523 crores. This marks our second consecutive quarter of high-teens revenue growth with high single-digit underlying volume growth and double-digit profit growth. Our standalone business delivered 13% sales growth performance, driven by 7% underlying volume growth. This is despite an estimated 150 bps impact from trade inventory correction in the quarter. While this has been a modest near-term impact in terms of the correction we've done, we believe that maintaining healthy channel levels is important for operational excellence and sales team to remain focused purely on off-takes. Standalone EBITDA was mildly impacted due to this correction. In home care, we delivered 19% value growth led by strong performance in air fresheners and home care liquids. Alongside that, we gained market share in household insecticides. This is encouraging and indicates that the actions we've taken across brands are beginning to deliver. Our electrics portfolio delivered sequentially improving performance, supported by the new 6-minute campaign, while incense sticks continue to scale strongly. Godrej fab maintained its strong double-digit growth trajectory and continued to strengthen its market position. Godrej spic, which was scaled nationally during Q1, continues to witness healthy consumer repeats and sequential growth with significant distribution headroom still available. During this quarter, we launched Godrej Ritz in select markets across West and South India. We also launched Godrej Zap, our entry into stain removers online. Both these new launches have been received well. Personal care delivered value growth of 8%. Soaps remained stable despite significant price increases and grammage reduction, although with a favorable comparator. Our premium liquids continued to do well. Cinthol bodywash continues to scale sequentially, while Muuchstac face wash progressed in line with our business plan. Actually, it progressed beyond our business plan. Hair colours maintained its growth momentum and continued to gain market share across our key bets. Perfumes and deodorants delivered strong double-digit growth supported by healthy underlying volume growth in deodorants and continued momentum in perfumes and EDPs. Our international portfolio delivered strong growth. In Indonesia, sales grew 20% with underlying volume growth of 8%. EBITDA grew 12% with LPG prices doubling. However, we have benefited from El Niño tailwind in Indonesia leading to increased mosquito infestation. With our future portfolio of LV, pocket, et cetera, we have seen tremendous success with double-digit underlying volume growth sustained. GAUM delivered another outstanding quarter. Sales grew 40% in INR terms and 23% in constant currency terms, supported by underlying volume growth of 16%.
Aasif Malbari (Godrej Consumer Products Ltd): Importantly, Gaum has now delivered seven consecutive quarters of double-digit top-line growth and 11 consecutive quarters of double-digit bottom-line growth. This reinforces our confidence that the improvements in the business is structural. We continue to be focused on the larger opportunity that the continent offers. The launch of HI incense sticks was well received and is having good early traction. The input cost environment remained significantly challenging through the quarter. Inflation intensified across crude-linked derivatives, palm oil, and commodity inputs. This led to one of the highest inflationary impacts in the last many years. Due to the nature of our portfolio in India and Indonesia, the impact of such inflation has been approximately has been high-single digit. Despite a significant portion of our portfolio being price point packed, we have taken stringent pricing actions combined with large cost-saving program and media and trade level investment optimization. We've tried to keep the share of voice range-bound. We have also increased the salience of our digital investments which have given us much higher ROI. We will continue to take calibrated pricing actions significantly in soaps and liquid detergents where the cost impact is large and the margins even today are below normative levels. With continued cost savings and future pricing, we will ensure that we continue to invest behind our growth drivers while managing to deliver on our stated profit growth guidance. We continue to hold our FY '22 guidance, high single-digit underlying volume growth in Standalone, and double-digit revenue and EBITDA growth at the consol level. With revenues running ahead of plan through the first half, we remain on track to deliver with the confidence to exceed it in certain areas. We remain confident in the resilience of our portfolio, the strength of our brands, and our ability to deliver sustained profitable growth going forward. Our measure of outperformance remains double-digit UVG and profit growth. Thank you.
Vishal Kedia (Godrej Consumer Products Ltd): We now open the call for questions.
Moderator: Thank you very much. We will now begin with the question and answers session. Anyone who wishes to ask a question may press star and then one on their touchtone phone. If you wish to remove yourself from the question queue, you may press star and then two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. Again to register for a question, please press star and then one. Our first question comes from the line of Abneesh Roy with Nuvama. Please go ahead.
Abneesh Roy (Nuvama): Yeah. Thank you. My first question is when the recent management transition happened a lot of imperatives and priorities were shared with us quite candidly. I understand when any management transition happens change in numbers will take time, so my question is not at all on numbers. My question is on the slightly softer aspects which you had mentioned. First, of course, was the digital advertising capability where Nisa in the Analyst Meet had said that you are quite low in terms of percentile. What are the initial changes which have happened without getting into numbers if you don't want to? Second is in terms of the hustle to get daily targets, market share, et cetera. What has changed? Again, no numbers needed. And third is in terms of HI new molecule in the advertising message or overall communication, is there any change? I haven't seen it and I may not have noticed the ad, so that's, I am not the right person. But if you could address these three aspects, that is my first question.
Aasif Malbari (Godrej Consumer Products Ltd): Hey, thanks Abneesh. So, I think, Abneesh, I think the first one in terms of, or let me put it this way, I did share the direction. I did share the strategy. I did share what are the multiple changes which we are looking at. And all of them have been changes which are well thought through. Over the next few months, you know, at regular intervals, we'll kind of share as to what progress we are making against some of them. Some of these changes which we spoke about are are structural. They result in I would say, change in the ways of working. It does require rebooting in terms
Aasif Malbari (Godrej Consumer Products Ltd): top percentile. Again, it doesn't happen overnight, but building in those capabilities, making those shifts, ensuring that we move significantly to the world of influencers, digital, etc. is something which we've started, and I do see ourselves kind of moving and getting into a top percentile over the next few quarters, but it's and it's again not to do with what percentage spend moved, it is more to do with capabilities and and do we believe that in each of the categories we are in the top percentile, yeah. And and and we know what is best-in-class and how to get there. So I do see in a few quarters getting there, but it's not about percentage of spend. So, I think that's the first one. When it comes to operational excellence, we are decisively moving, and we understand where the rhythm should be built, what should be corrected, and how it should be corrected. And and you know, I think some of the corrections which we've started to kind of take in terms of trade inventory etc. is is purely with with that in mind because you need the engine to kind of fire where the entire sales team is focused on off-take, and primary is completely run without any human touch. Yeah, and and for that, you you bring down the inventories to completely system-defined inventories and move that way. So, we are making decisive shifts on this, and I do see ourselves getting into a rhythm of operational excellence quite soon. Coming to the new advertisement on HI, the product is the RNF product. The ad also kind of calls it out in the ad. The ad is a ad which is significantly cut, clutter-breaking, and we do believe that this will give us a bigger impact in terms of reach.
Abneesh Roy (Nuvama): Sure. Second, on India CEO, is there any update you want to give, and any timeline you are looking at? I know this very positions, timelines can be tricky.
Moderator: Sorry to interrupt Abneesh sir. Your audio was not clear in between, if you can repeat your question.
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