GCPL's ad spends grows 49.48% YoY to Rs 283.87 crore in Q2 FY23

The FMCG player's net profit has taken a hit and has gone down by 25.06% on a YoY basis and increased by 3.98% on a QoQ basis in the second quarter of the ongoing financial year

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GCPL's ad spends grows 49.48% YoY to Rs 283.87 crore in Q2 FY23

FMCG player Godrej Consumer Products (GCPL) has reported a decline of 25.06% in its consolidated net profit at Rs 358.86 crore for Q2 of FY22, as compared to Rs 478.89 crore it had clocked in the corresponding quarter a year ago.

Further, on a QoQ basis, its net profit has increased by 3.98% from the previous quarter’s Rs 345.12 crore.

On the consolidated front, the advertising and publicity spends of GCPL have grown by 49.48% to reach Rs 283.87 crore. In the corresponding quarter of the previous fiscal the ad-spends of the company stood at Rs 189.90 crore.

On a quarterly basis, the ad spends of the FMCG player have grown from Rs 201.39 crore in Q1 of FY23, leading to a spike of 40.96%.

The revenue from the sale of products of the Godrej group's FMCG arm was up 7% at Rs 3,364.45 crore during the quarter under review, as against Rs 3,143.61 crore in the corresponding period last fiscal.

"Our overall EBITDA declined by 15% driven by consumption of high-cost inventory, upfront marketing investments and a weak performance in our Indonesia and Latin America and SAARC businesses. PAT without exceptional items and one-offs declined by 21%," stated Sudhir Sitapati, Managing Director and CEO, GCPL.

The company's India revenue was up 8% to Rs 1,985.03 crore in the September quarter from Rs 1,838.14 crore in the preceding year.

"From a category perspective, in India, we saw continued momentum in Personal Care, which grew by 18%. Home Care grew by 2%," he said.

With inflationary pressures abating, Sitapati said he expects a recovery in consumption and gross margins alongside continued higher marketing investments with a significant focus on reducing controllable costs.

"We continue to have a healthy balance sheet and our net debt to equity ratio continues to drop. We are on a journey to reduce inventory and wasted cost and are deploying this to drive profitable and sustainable volume growth across our portfolio through category development," he said.

The FMCG player has clocked in an 8% YoY growth in sales amounting to Rs 1953 crore in Q2 of FY23, thereby posting a steady growth in the country - driven by pricing.

The statement also mentioned that GCPL has showcased strong growth momentum in the Personal Care segment accompanied by a steady performance in the Home Care category.

While the sales from the Personal care category amounted to Rs 1017 crore, an 18% increase on a YoY basis; the Home care category contributed to sales worth Rs 869 crore, a 2% hike on a yearly basis.

“With significant corrections in commodities like palm oil derivatives and crude oil, we expect recovery in consumption, gross margins expansion and upfront marketing investments in the upcoming quarters,” the statement mentioned.

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