Godrej Consumer Products Ltd. (GCPL), the fast-moving consumer goods giant, stunned markets with its announcement of a net loss of ₹1893.2 crore for the fourth quarter that ended on 31 March, 2024. This figure sharply contrasts with the net profit of ₹452 crore reported in the corresponding quarter of the previous fiscal year.
The company attributed this unexpected loss to an exceptional charge of ₹2378 crore related to its Godrej Africa, US and Middle East (GAUM) business. Sudhir Sitapati, Managing Director and CEO of GCPL, said that this exceptional charge led to the reported loss, despite underlying growth in various operational metrics.
In a regulatory filing, GCPL revealed that its consolidated reported numbers showed a strong performance in various aspects. Underlying volume growth stood at 12% with the India business volume soaring by 15% and the Indonesia volume witnessing a 12% growth. Despite this growth, the company’s bottom-line was heavily impacted by the exceptional charge.
Revenue and Operation
GCPL’s revenue from operations increased by 5.8% to ₹3385.6 crore compared to ₹3,200 crore in the same period of the previous year. This revenue growth slightly exceeded CNBC-TV18’s poll prediction of ₹3327 crore for the quarter. Despite the revenue growth, the net loss overshadowed the revenue figures.
At the operating level, earnings before interest, tax, depreciation, and amortization (EBITDA) rose by 17.9% to ₹755.7 crore. The EBITDA margin also saw improvement, standing at 22.3% compared to 20% in the corresponding period last fiscal year.
Dividend Declaration
Despite the challenging financial results, the board of directors declared an interim dividend of ₹10 per share (1000% on shares of face value of ₹1 each) for the financial year 2024-25. The record date for identifying eligible shareholders is Tuesday, 14 May, with the dividend to be paid on or before Wednesday, 5 June.
Godrej’s Future Outlook
Looking ahead, Sudhir Sitapati emphasized GCPL’s focus on driving volume-led growth along with healthy investments in brands and efforts to improve profitability. GCPL aims to launch new products in accordance with its purposes.
Market Response
Despite these financial results, Godrej Consumer’s shares rallied in the market, rose by up to 8% following the release of their Q4 performance. Analysts from various brokerage firms maintained their positive outlook on GCPL’s stock, citing better-than-expected operational performance, strong volume growth and promising possibilities in international markets.
JP Morgan, Jefferies and Emkay Global are among the brokerage firms that retained their positive ratings on Godrej Consumer shares, with price targets indicating upside potential.
