GCPL battles cost, demand woes

Hitting a wall like other companies, GCPL too emphasized on slowing urban demand in India. The household insecticides segment suffered owing to the relatively poor season.

- Pallavi Pengonda

Godrej Consumer Products Ltd's (GCPL) third quarter of FY25 was gloomy, and it wasn't a surprise. The company had said in a pre-quarter update in early December that Q3 revenue and profitability would be weak mainly because its India business was facing challenges in soaps and household insecticides. These segments contribute significantly to the overall mix.

On a high base, GCPL's Q3 consolidated Ebitda margin contracted 291 basis points (bps) year-on-year to 20%. This is the first drop (see chart) in the measure in many quarters. Gross margin contracted 175 bps to 54%. That, along with high other expenses and staff costs, weighed on Ebitda margin. Thus, Ebitda fell 10% to ₹756 crore at a time when total operating revenue rose by almost 3%.