Godrej consumer profit rises 14%, weighs calibrated price hikes to offset inflation

Mumbai: Godrej Consumer Products expects commodity inflation to intensify in the December quarter, with rising costs of crude-linked derivatives, palm oil and other inputs prompting further price increases in soaps and liquid detergents as the company seeks to protect growth. "This led to one of the highest inflationary impacts in the last many years," said company chief Aasif Malbari, adding that this has amounted to a high single-digit impact on its India and Indonesia businesses. He expects commodity inflation to be slightly higher in the December quarter than in the preceding three months.

The company has already taken pricing actions but remains below normative margin levels in soaps and detergents, it said. "We will continue to take calibrated pricing actions, significantly in soaps and liquid detergents," he added.

The cost pressures come as Malbari begins reshaping the business following his appointment as MD and CEO in August, after Sudhir Sitapati stepped down. Alongside pricing, the company is relying on cost savings and tighter media and trade spending to protect profitability.


Read more: Trent Q2 Results: Cons profit jumps 25% YoY to Rs 468 crore; revenue climbs 22%

It reiterated its FY27 guidance of high single-digit underlying volume growth in the standalone business and double-digit revenue and Ebitda growth at the consolidated level.

The company reported 19% year-on-year revenue growth in the September quarter, with underlying volume growth of 8%. Net profit rose 14% to ₹523 crore, while Ebitda increased 12%. Standalone sales grew 13%, despite an estimated 150-basis-point impact from trade inventory correction.

Read more: IndiGo Q2 Results: Loss narrows YoY to Rs 1,879 crore; revenue rises 26%

Malbari said the company would prioritise absolute earnings growth over margins amid sharp commodity movements. "We would try to maintain growth in Ebitda at a consolidated level, and that is where the focus should be," he said.

Advertising expenditure has also come under scrutiny as the company balances cost pressures with the need to strengthen brands. Standalone advertising spending declined 17% in the September quarter, following a 7% fall in the June quarter.