As Godrej Consumer Products' net profit falls, recovery appears set for second quarter

By

Isabelle Crossley

Published
Aug 2, 2017

After a net profit fall of two percent in the last financial quarter, July sales in products like cosmetics have picked up and suggest a recovery in the next quarter for Godrej Consumer Products.

The immediate transaction period of July has seen an increase in sales following the previous drop and Vivek Gambhir, Managing director of Godrej Consumer Products Ltd stated that, “We believe the recovery could take about a couple of months” after seeing the latest figures. Moreover, despite a net profit fall, growth remained positive last quarter with a rise of six percent in revenue growth. Godrej’s maker of Good Night and Cinthol reported six percent revenue growth to 1,186 crore rupees (around 178 million dollars) and a two percent dip in net profits to 150 crore rupees (around 22.5 million dollars). Godrej Group’s consumer products sector stocks items from cosmetics to home wear across the country.

Gambhir cited fears around the recent implementation of the Goods and Services Tax (GST) as one reason for the last quarter’s performance and that the next quarter will see both the GST and Godrej stabilise. Gambhir stated, “We expect the situation to normalise during the course of the second quarter and witness stronger growth in the second half of the year. This will be accomplished as the channel adapts to the new tax system, a strong monsoon and benefits of lower prices that get passed on to consumers.”

Western and southern parts of the country are recovering faster than the east and north, said Gambhir. Stock levels has dwindled due to the GST’s implementation but now Godrej is working on stocking enough to meet customer demand.