GCPL anticipates flat Q3 volume growth due to higher soap prices and unseasonal rainfall impacting its home insecticides (HI) sales. These two segments together account for two-thirds of its standalone revenue, shaping domestic market performance.
Soap price increases affect growth
A sharp rise in palm oil and derivative prices, up by 20-30% year-on-year, has increased soap production costs. To manage this, GCPL raised soap prices, reduced pack sizes, and modified trade incentives. These actions have lowered inventory levels in distribution channels but had minimal impact on consumer demand.
Unseasonal rainfall slows home insecticides
Unseasonal rainfall and delayed winters in northern India have slowed HI segment sales. GCPL’s mosquito repellents, such as Good Knight and HIT, have seen reduced demand this quarter. The weather challenges have significantly impacted the segment, which contributes another one-third to the company’s standalone revenue.
Resilient performance in other segments
While soaps and HI have struggled, GCPL expects the rest of its portfolio to achieve double-digit volume growth. The company believes that stabilisation in soap prices will normalise growth patterns in the coming months, consistent with historical trends.
GCPL plans for long-term growth
The company views current challenges as temporary and remains committed to long-term strategies. GCPL’s management continues to invest in growth initiatives, focusing on overcoming short-term difficulties.
International markets deliver growth
GCPL’s international business shows strong results. Indonesia, its second-largest market, is on track to achieve mid-single-digit volume growth and high single-digit sales growth. However, the GAUM markets (Godrej Africa, USA, and Middle East) are seeing temporary volume declines due to adjustments in trade stocks and portfolio simplifications. Despite this, the company has reported improved profitability, with four consecutive quarters of strong EBITDA margins in GAUM.
GCPL plans to release its detailed financial performance for Q3 FY25 after Board approval, providing further updates on its strategies and market performance.
