The share price of this fundamentally strong FMCG company in India was up by 5 percent to an intraday high on Friday after Reporting a Net profit increase of 13 percent.
Share Price Movement
In Friday’s trading session, Godrej Consumer Products‘s share price was up by 4.89 percent touching the day’s high of Rs. 1,315.95. The stock was trading at Rs. 1292.10 per share and was up 3% from the previous close of Rs.1,254.50 per share. In the past year, the stock has given 32.31 percent returns.
Q2FY25 Results update
The stock surge was driven by the good results in revenue and net profits reported by Godrej Consumer Products Ltd for the recent quarter.
In its latest filing for the quarter ending September 2024, the company announced a 1.77 percent rise in revenue, reaching Rs.3,666 crore compared to Rs.3,602 crore in Q2 FY24. On a quarter-over-quarter basis, the operational revenue was up by 10 percent from Rs.3,332 crore in Q1FY25.
During the same period, net profit increased by 13.39 percent to Rs.491 crore in Q2 FY25, compared to Rs.433 crore in Q2 FY24, and up by 8.86 percent from Rs.451 crore in Q1 FY25.
Regarding return ratios, the return on capital employed (ROCE) currently stands at around 19 percent, whereas the return on equity (ROE) is at -56 percent which was due to a one-time exceptional item. The stock is trading at a P/E (Price to Earnings) ratio of around 72.8. The company also has a current ratio of 1.07 and debt to equity of 0.31.
India contributes around 62.75% for revenue, Indonesia – 14%, Africa – 17.58%, and others contribute around 6% in Q2FY25. Apart from African business, the contribution from other regions has increased year on year. The board declared Rs. 5 per share on October 24, 2024, and the record date stood at November 1, 2024.
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Management Commentary
Managing Director and CEO Sudhir Sitapati said that GCPL experienced a steady quarter despite challenges from rising oil costs and weak consumer demand in India. The standalone business grew by 7% in both volume and value but reported flat EBITDA. Sitapati believes this is a short-term impact and plans to recover margins through price increases.
While the GAUM (Godrej Africa, USA, and Middle East) region faced a weak topline, it achieved a strong bottom line with a 33% increase in EBITDA despite an 8% decline in organic volumes. Overall, GCPL saw 5% growth in organic UVG and USG which reflects the strength of its diverse portfolio.
Company Profile
Godrej Consumer Products Ltd, headquartered in Mumbai, India, provides innovative financial technology solutions. The company specializes in software for retail, corporate, and investment banking, along with consulting and outsourcing services. As a subsidiary of Godrej Corporation, it supports over 900 clients globally, enhancing their operational efficiency and compliance.
Written by – Santhosh S
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