Godrej adds to FMCG gloom

Under pressure

- Pallavi Pengonda

Shares of Godrej Consumer Products Ltd (GCPL) plummeted over 8% on Monday after it warned of weaker margins and volumes in the three months to December (Q3FY25). After market hours on Friday, GCPL said its India business is expected to report flattish volume growth this quarter. For perspective, in the first half of FY25, GCPL's domestic volumes grew 7-8%.

Q3 volume growth is expected to be impacted by a poor show in the soaps and home insecticides (HI) segments. Soaps form a third of India business and the 20-30% on-year rise in palm oil and derivatives prices has hurt. To offset surging costs, GCPL hiked prices, lowered the grammage of key packs, and reduced trade schemes. This reduced inventory across wholesale and household pantry. Further, a delayed winter in north India and a cyclone in the south have not been conducive to growth in the HI segment, which makes up a third of India business.