Godrej Consumer Products Ltd (GCPL), the fast-moving consumer goods arm of the Adi Godrej-led conglomerate, expects India's consumption demand to revive over the next 12 to 18 months.
Speaking at a press roundtable on Wednesday, GCPL CEO and MD Sudhir Sitapati cited several factors—including income tax cuts announced in Budget 2025-26, easing food inflation, and the anticipated pay commission—as potential drivers of demand recovery.
His comments come as GCPL reported a 6.3% year-on-year rise in net sales to Rs 36 billion, falling short of several brokerage estimates. The company’s India business grew 8% in value and 4% in volume, led by a 14% growth in home care and 4% in personal care.
According to Elara Securities, volume growth was dampened by price-volume rebalancing in the soaps category amid rising palm oil costs.
For the full financial year 2024-25 (FY25), GCPL’s performance missed its own guidance on both volume and profitability, with EBITDA declining 2% versus expected mid-teen growth, JM Financial noted.
“This performance was predominantly dragged by personal wash (volumes and profitability impacted by steep inflation in palm oil),” the brokerage said.
Sitapati acknowledged the inflationary challenge but described it as a “short-term blip.” He noted that GCPL chose to pass on only 15–16% of the palm oil price increase to consumers, opting against larger price hikes.
Outlook for FY26
GCPL has guided for mid-to-high single-digit volume growth in FY26. It expects a recovery in profits as palm oil prices stabilise, a trend already visible over recent weeks, Sitapati said.
“We are bullish about consumer demand over the next 12 months for a variety of reasons. The El Niño effect drove up food prices in India last year, and food price inflation has a direct impact on FMCG consumption. Now that El Niño has reversed, food inflation came down during the January to March period,” he said.
He also highlighted that the upcoming pay commission, expected within the next 12 months, has historically boosted FMCG demand.
“So these are the reasons why, over the next 12 to 18 months, I believe FMCG may see a revival,” said Sitapati.
Godrej Targets Underpenetrated Segments
GCPL is pivoting to high-growth, underpenetrated categories such as body wash, liquid detergents, deodorants, air fresheners, pet care, and sexual wellness.
Following its 2023 acquisition of Raymond Consumer Care’s FMCG business—which added Park Avenue deodorants and KamaSutra products to its portfolio—GCPL launched its pet care brand ‘Godrej Ninja’ in Tamil Nadu in April 2024.
In liquid detergents, its Fab Liquid brand, launched at Rs 99, has already achieved an annualised revenue run rate of Rs 250 crore. The company is also expanding its deodorant offerings with affordable options like the Rs 99 Block antiperspirant and a lower-priced KamaSutra variant.
Core brands Goodknight and Hit posted double-digit growth in Q4, driven by innovations such as a patented molecule (RMF) designed to curb illegal incense stick use and raise consumer awareness.
Sitapati believes that focusing on the "categories of tomorrow" will help GCPL overcome short-term challenges and drive long-term growth.
