Godrej Consumer Products Ltd. (GCPL) saw its shares decline by 0.84% to ₹1,321.20 as the company announced that it would miss its target for mid-teens EBITDA growth in Q2 FY25 due to challenging operating conditions in India. The company cited rising palm oil costs and increased competitive pressures as the primary factors affecting profitability. Palm oil prices, which have surged by high teens since March, put pressure on margins as the company opted not to pass the entire cost hike to consumers.
While GCPL’s standalone business is expected to post high single-digit volume and value growth, consolidated EBITDA growth will be lower than expected. However, GCPL’s international businesses, particularly in Indonesia, continue to perform robustly, with high single-digit volume growth and double-digit sales growth in constant currency. Despite challenges, GCPL has maintained strong growth in its Godrej Africa, USA, and Middle East (GAUM) businesses, improving margins and INR profits for the third consecutive quarter.
As the company continues to navigate inflationary pressures, management remains focused on long-term growth initiatives, including its rural van program and the development of new categories.
