Godrej Consumer extends fall on disappointing Q1 results

STOCK MARKET - Godrej Consumer Products (GCPL) dipped 7% to Rs 958, extending its Monday’s 2% fall on BSE, after the company reported 9% decline in consolidated net profit to Rs 225 crore, as advertising and other expenditure grew sharply during the June quarter (Q1FY18).

Consolidated net sales grew 3% to Rs 2,177 crore, against Rs 2,117 crore a year ago. India business sales growth of 6% year-on-year, led by flat volume growth.

Analysts on average had expected profit of Rs 264 crore on net sales of Rs 2,279 crore.

“While sales in April and May were strong, June sales growth dipped due to channel de-stocking in the run up to the implementation of the transformative Goods & Services Tax (GST),” said Ms. Nisaba Godrej, Executive Chairperson, GCPL.

“At 3%, sales growth was in line with expectations; however, competitive pressure in Indonesia, higher spends on new launches and one-off costs led to a 200bps decline in operating margins,” according to analysts at SBI Cap Securities.

Thus far in the calendar year 2017, the stock had strong run-up, before it decline in past three trading sessions, rallied 42% against 22% rise in the S&P BSE Sensex till July 27, 2017.

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