GCPL spends Rs 363.95 crore on advertising in Q2 FY2025

New Delhi: In Q2, FMCG giant Godrej Consumer Products increased its advertising expenditure by Rs 30.13 crore, totalling Rs 363.95 crore, compared to Rs 330.82 crore spent in Q1 FY2025.

However, on a yearly basis, the company’s adex reduced marginally as it spent Rs 365.94 crore in Q2 FY2024. 

The FMCG major reported a 13.52% rise in its consolidated net profit to Rs 491.31 crore in the September quarter, helped by volume growth in the domestic market and Indonesia.

In the first six months of the current fiscal year, the company has spent Rs 694.77 crore on advertising.

It had posted a net profit of Rs 432.77 crore in the July-September quarter a year ago, according to a regulatory filing by Godrej Consumer Products (GCPL).

GCPL is the FMCG arm of Godrej Industries Group.

Revenue from the sale of products of the Godrej Group FMCG arm grew 2.2% to Rs 3,647.11 crore during the quarter under review. It was Rs 3,568.36 crore in the corresponding period last fiscal.

GCPL's total expenses in the September quarter were marginally up at Rs 3,039.88 crore.

The total revenue of GCPL, which owns brands such as Good Knight, Cinthol and HIT, rose 2.3 per cent to Rs 3,752.32 crore in the September quarter.

GCPL's revenue from the domestic market climbed 6.1% to Rs 2,300.65 crore in the second quarter compared to Rs 2,168.21 crore a year ago.

Its Managing Director and CEO Sudhir Sitapati, said, "GCPL has had a steady quarter given the headwinds of oil costs and tough consumer demand in India. Our standalone business grew by 7% in both volume and value and flat reported EBITDA." 

GCPL's standalone EBITDA (earnings before interest, taxes, depreciation, and amortisation) margin of 24.3% is at the lower end of our targeted band and is caused entirely by high inflation on palm oil, which was further exacerbated by the import duty on oil.

"We think this is a short-term hit and we will recover the margins through judicious price increases and stabilising of costs," he said.

Similarly, revenue from GCPL's second biggest market, Indonesia, increased 8.63% to Rs 513.81 crore. It was Rs 472.96 crore in the year-ago period.

Indonesia market continued its "steady performance" with a 7% rise in volume and 17% EBITDA growth, Sitapati said.

GCPL's revenue from Africa, including the Strength of Nature, declined 21% to Rs 644.56 crore in the September quarter.

"GAUM (Godrej Africa, USA, and Middle East) continued to have a weak topline quarter but an exceptional bottom-line quarter. While organic volumes declined by 8% and value declined by 10%, reported EBITDA grew by 33%," he said.

However, GCPL's revenue from other markets was 35.85% higher at Rs 247.58 crore in Q2FY25.

"While the overall quarter was 5% organic UVG, 5% organic USG and 8% reported EBITDA, the topline performance in Asia and the bottom-line performance in our international businesses have been encouraging," Sitapati said, adding that "High-single digit volume growth during a period of low soap volume growth is testimony to the increasing strength of the rest of our portfolio." GCPL Air Care business, in which it sells sprays, air fresheners and diffusers under the brand name Aer, continued growth and its laundry, incense sticks and sexual wellness (Park Avenue and KamaSutra brands acquired from Rayond) rapidly scaled up.