Godrej Consumer flags short-term margin pain on crude costs

Mumbai: Godrej Consumer Products Ltd (GCPL) has flagged near-term margin pressure as crude-linked input costs stay elevated but believes the current inflation cycle is manageable and less disruptive than past commodity spikes.

"At this current stage, this is not an alarming inflation because it is spread out over all categories," said Sudhir Sitapati, MD and CEO, GCPL, on the company's earnings call on Wednesday, adding that unlike sharp palm oil spikes that hit specific segments, the present cost pressures are more evenly distributed, making them easier to offset through calibrated pricing.

The company, which sells household insecticides, soaps and hair colour, said it expects "some pressure in the EBITDA percentage margin" over the next couple of quarters if crude oil sustains at $100-110 a barrel.


"I am expecting poor margins till oil remains at $100-$110, but higher revenue," he said, adding, "I am netting out a reasonably good level as far as revenue goes."