Soap, home insecticides segments hit, GCPL expects flattish volume growth in India sales in Q3

GCPL anticipates flat volume growth and mid-single-digit sales growth in the domestic market due to various challenges.

Impacted by an increase in soap prices and unseasonal rainfall slowing down sales of the home insecticides (HI) segment, Godrej Consumer Products expects a "flattish" underlying volume growth and a mid-single-digit sales growth in the domestic market in the December quarter.

Both segments jointly contribute to two-thirds of GCPL's standalone revenue — mainly income from operations from the domestic market.

However, the rest of the portfolio is demonstrating good performance and is expected to deliver double-digit underlying volume growth, Godrej Consumer Products Ltd (GCPL) said in an update on business conditions and quarterly performance to the exchanges.

"The demand conditions in India have been subdued for the past few months which is evident in the FMCG market growth," it said.

A surge in palm oil and derivatives prices to the extent of a year-on-year increase of 20-30 per cent has impacted the soaps category, representing one-third of GCPL's standalone business revenue.

"To partly offset the cost increases we have taken price increases, reduced grammage of key packs and reduced various trade schemes," said the Godrej Industries Group FMCG arm.

Such pricing actions typically have minimal impact on category consumption but do result in reduced inventory across wholesale and household pantries, it said.