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Company Report

Godrej Consumer Products

For the first quarter ended June 30, this year Godrej Consumer Products Ltd has put up a slightly better performance than its preceding quarter but the overall sluggishness in the FMCG sector is reflected in its figures. Total income at Rs 119.18 crore was up 1 per cent from Rs 118.01 crore in the corresponding previous quarter and sequentially up 10 per cent from the March quarter income of Rs 108.62 crore.

Net sales at Rs 119.01 crore was up 1 per cent from Rs 117.93 crore in the previous corresponding quarter and sequentially it was up 10 per cent from the March quarter sales of Rs 107.94 crore.

The contribution of soaps to the overall turnover of GCPL is on the rise again (59 per cent). Sale of soaps for the quarter at Rs 70.07 crore (Rs 65.69 crore) was up 7 per cent. The hair color segment, which had been showing promising signs of growth contributing 25 per cent to 30 per cent to the overall turnover, has slackened sales of Rs 29.32 crore (Rs 28.53 crore) up by just about 3 per cent from the corresponding previous quarter and down 9 per cent from the March quarter sale of Rs 32.32 crore.

Toiletries have performed badly with a 30 per cent year-on-year decline in sales. Its performance in the liquid detergents segment has been going from bad to worse with a 84 per cent sequential decline in sale. However, the detergent sales were 38 per cent on a YoY basis. Total sales of Godrej products was up 2 per cent on a YoY basis and 3 per cent sequentially.

Operational cost was up 4 per cent at Rs 100.49 crore (Rs 96.93 crore) on YOY basis. Contrary to what normally happens in the case of FMCG companies, GCPL has brought down its advertisement and promotion costs by 26 per cent on a YoY basis and 25 per cent sequentially. Staff costs were down 6 per cent over the corresponding previous quarter and went up by only 1 per cent sequentially. Other expenditure went up by 3 per cent on a YoY basis and 8 per cent sequentially.

With a tax provision of Rs 2.01 crore (Rs 5.43 crore) during the reporting quarter, GCPLs net profit was up 8 per cent on a YoY basis to Rs 13.82 crore (Rs 12.77 crore) and 15 per cent up from the March quarter profit of Rs 11.99 crore.

The stock currently trades at Rs 124.35 discounting its June quarter annualised EPS of Rs 9.52 by 13 times. It is almost overpriced given its lack of growth.

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