GCPL's ad spends up 28.91% YoY to Rs 365.94 crore in Q2FY24

In the second quarter of the current fiscal year, Godrej Consumer Products saw its ad spends going up 28.91% on a YoY basis to Rs 365.94 crore. In Q2FY23, the FMCG major had spent Rs 283.87 crore on advertising.

On a half-yearly basis too, the conglomerate upped its spending on advertising by 41.44% on a YoY basis as it allocated an ad budget of Rs 686.33 crore in H1FY24 as opposed to Rs 485.25 crore it spent during the first half of previous fiscal year.

This time around, the company’s PAT also moved up 20.60% YoY to Rs 432.77 crore as against Q2FY23 wherein the same stood at Rs 358.86 crore.

However, when comparing the PAT of the company in H1FY24, which is Rs 751.59 crore to that of H1FY23, the FMCG major saw a single digit growth of 6.76% on a YoY basis.

In the first half of the previous fiscal year, GCPL amassed Rs. 703.98 crore.

It is to be noted that the company’s Revenue from Operations also grew 6.19% YoY in Q2FY24. This time around, GCPL clocked in a revenue of Rs 3601.95 crore from operations, as against Rs 3391.92 crore it generated during Q2FY23.

Similarly, when comparing the same on a half yearly basis, the company’s Revenue from Operations went up  8.19% YoY, from Rs 7050.86 crore in H1FY23 to Rs 6516 crore in H1FY24.

On the other hand, the total expenses of the conglomerate also increased slightly by 2.87% on a YoY basis to Rs 3035.97 crore in Q2FY24. In the corresponding period of the previous fiscal, the same stood at Rs 2951.38 crore.

On a half yearly basis, the total expenses of the conglomerate were up 6.10% YoY. In H1FY24, GCPL’s total expenditure summed up to Rs 5992.31 crore, whereas in H1FY23, the same amounted to Rs 5647.67 crore.

In its regulatory filing, GCPL also mentioned that while the Home Care segment grew by 5%, it was the company’s Personal Care segment that witnessed a decline of 1%.

“Our newly acquired brands witnessed a sharp improvement in their sequential sales run-rate, clocking a sales value of ₹142 crore. The integration of the brands has largely been completed, with cost synergies expected to flow from 2HFY24. Estimate EBITDA to be positive, despite the scaling up of media investments. The brands are on track to achieve fullyear ambition,” the company statement read.

Commenting on the quarterly update, Sudhir Sitapati, MD and CEO, GCPL, said, “We delivered a steady performance in 2Q FY2024, despite the tough operating environment. Our Consolidated volumes grew in double-digits at 10% while sales grew by 6%. Sales in constant currency terms grew by 16%.”

“In India, we delivered 11% volume growth. In Indonesia, our performance continues to improve with double-digit constant currency growth of 14%. Africa, USA and Middle East continue to grow in double-digits in constant currency terms, while performance in INR terms was impacted due to the Naira devaluation,” he said.

He also went on to add that the quality of GCPL’s profits continues to improve consistently over the last few quarters with reported Consolidated Gross Margin improving sharply by 700 bps year-on-year and 110 bps quarter-on-quarter.

“Our EBITDA Margin, too, improved by 360 bps year-on-year despite continued media investments, which increased 33% year-on-year,” he highlighted.

Furthermore, he also emphasised, “We continue to remain focused on driving volume-led growth along with healthy investments in our brands and improvement in profitability. We continue to have a strong balance sheet. We are on track in our journey to reduce wasted cost and are deploying this to drive profitable and sustainable volume growth across our portfolio through category development. We remain committed to our purpose of bringing the goodness of health and beauty to consumers in emerging markets.” 

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