Monday, 6 July 2020

Godrej Consumer Products Limited - Pre Q1FY21 Update

This update provides an overall summary of the operating performance and demand trends witnessed during the quarter ended 30th June 2020. This will be followed by a detailed performance update, post the approval of 1QFY21 financial results by the Board of Directors.

1QFY21 quarter was an unprecendented period due to the spread of Coronavirus pandemic across the globe, impacting all the geographies of our operations in the early part of the quarter. We at Godrej Consumer Products Limited (GCPL) have been working on a safety first principle, ensuring that our employees and business partners are safe and are taking all necessary precautions to control the spread of Coronavirus.

While we did see impact of lockdown in the early part of the quarter, we displayed strong agility in ramping up the production and resolving logistics challenges. We also leveraged techonology, strong relationships with our channel partners and were agile with feet on ground to meet the end consumer demand.

The demand trends were mixed for the categories and geographies of our operations. In India, resurgence of Household Insecticide category continued with strong underlying consumer demand. We did witness strong momentum in the Hygiene category, however saw muted demand in Hair Colour and Air Freshener, which were temporarily impacted by the lockdown. We expect close to mid single digit, volume driven sales growth in the quarter.

 In Indonesia, in spite of disruptions caused by Coronavirus, we expect close to mid single digit constant currency sales growth. We are witnessing strong demand in Household Insectide category and strong traction in the Hygiene category. In GAUM (Godrej Africa, USA, Middle East), we expect sales decline in early twenties, in constant currency terms.

Amidst disruptions caused by Coronavirus, most of the key countries were in standstill mode in April and early May resulting in sales loss. We have seen strong recovery from mid May and June across most of our markets of operations. Within the ‘others’ geographies, the performance in Latin America is expected to be steady in constant currency terms.

However, in INR terms we expect the performance to be weak. Performance in SAARC countries continues to be steady. At consolidated level, we expect absolute sales to be marginally lower compared to the base quarter in INR terms.

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