GCPL ad spends zoom 59.09% YoY to Rs 320.39 crore in Q1FY24

The first quarter of the current fiscal year saw Godrej Consumer Products’ ad spends zooming in by 59.09% on a Year-on-Year basis as the FMCG major spent Rs 320.39 crore in the quarter ended June 30, 2023.

It spent Rs 201.39 crore in the corresponding quarter of the previous fiscal year.

The company’s PAT, on the other hand, stood at Rs 318.82 crore in the June quarter, which is 7.62% down YoY from Rs 345.12 crore the FMCG major clocked in during Q1FY23.

The FMCG major, in its filing, stated that this decline was due to expenses incurred on exceptional items including the board’s decision to approve a capital expenditure of Rs 900 crore for setting up new manufacturing sites in Tamil Nadu and Madhya Pradesh, Rs 77.52 crore on account of the acquisition of Raymond Consumer Care Business and Rs 4.26 crore on account of other restructuring costs.

"Consolidated net profit grew 19% year-on-year (without exceptional items and one-offs)," it said.

However, revenue from the sale of products of Godrej group's FMCG arm was up 10.45% at Rs 3417.86 crore during the first quarter of the current fiscal against Rs 3094.31 crore a year ago.

“Consolidated sales grew 10%, led by a 10% growth in volume and constant currency growth of 15% year-on-year,” GCPL said in its earning statement.

Additionally, the FMCG major’s total expenses during the quarter were up 9.64% YoY at Rs 2956.36 crore, while its revenues were Rs 3518.02 crore, up 11.6%.

Moreover, GCPL's India revenue rose 8.43% YoY to Rs 2005.48 crore during the quarter from Rs 1849.41 crore a year ago, led by of 12% volume growth.

Its home care segment, consisting of household insecticides and air fresheners, grew 14%, while the personal care vertical, having hair colour and personal wash categories, rose 2%.

“Sales grew 15% in constant currency terms on the back of structural initiatives taken last year. Our EBITDA margins were at 19.5%, up 420 bps year-on-year, led by a reduction in trade promotions and scale leverage,” said GCPL.

As per Sudhir Sitapati, Managing Director, GCPL, the company started the year on a positive note and achieved healthy volume-led sales growth.

“In organic terms, our consolidated sales increased by 9% YoY, driven by healthy volume growth of 8%. Sales in constant currency terms increased by 13%,” he pointed out.

Further, he also stated that the company remains focused on driving volume-led growth, along with healthy investments in its brands and improvement in profitability.

“We continue to have a strong balance sheet. We are on track to reduce wasted cost and drive profitable and sustainable volume growth across our portfolio through category development,” he said.

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