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Godrej Consumer Products- Q1FY22 Result Analysis & Conference Call Highlights

Godrej Consumer Products- Q1FY22 Result Analysis & Conference Call Highlights

Published on 11 August 2021 .Views 34 .Comments 0
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Q1FY22 Result Analysis

1) Q1FY22 Result:

  • The company reported decent growth in its revenue from operations of the company i.e., 24.4% YoY and 6% QoQ to Rs. 2,894.5 Cr. in Q1FY22 against Rs. 2,327 Cr. in Q1FY21 and Rs. 2,731 Cr. in Q4FY21.
  • The Earnings before Interest, Tax, Depreciation, and Amortisation (EBITDA) of the company has increased by 26.9% YoY from Rs. 473 Cr. in Q1FY21 to Rs. 600 Cr. in Q1FY22. Sequentially, the EBITDA of the company has increased from Rs. 549 Cr. in Q4FY21, amounting to the growth of 9.3%.
  • The EBITDA margin of the company stood at 21% in Q1FY22 up by 50 bps YoY and 70 bps QoQ.
  • The Profit Before Tax (PBT) of the company has increased by 32.1% YoY from Rs. 410 Cr. in Q1FY21 to Rs. 541 Cr. in Q1FY22. Sequentially, the PBT figure has grown up 27.4% from Rs. 424 Cr. in Q4FY21.
  • The Net Profit of the company for the quarter ended 30th June 2021 stands at Rs. 414 Cr. in Q1FY22 against Rs. 395 Cr. in the quarter ended 30th June 2021 and Rs. 366 cr. in Q4FY21 amounting to growth of 4.8% YoY and 13.1% QoQ.
  • The Net Profit Margin of the company stood at 14.3% in Q1FY22 down by 270 bps YoY and up by 90 bps QoQ.

Godrej Consumer Products- Q1FY22 Result

Godrej Consumer Products- Q1FY22 Result

2) Segment-Wise Revenue:

  • The revenue from the India Business of the company has grown by 20.3% YoY and 10.7% QoQ to Rs. 1,661 Cr. in Q1FY22 against Rs. 1,381 Cr. in Q1FY21 and Rs. 1,500 Cr. in Q4FY21.
  • The next major business segment for the company after India is Africa (including Strength of Nature) wherein the company has registered yearly growth of 58.7% YoY and 10.1% QoQ to Rs. 694 Cr. in the first quarter of FY22.
  • The Indonesian business has reported flat growth yearly and de-growth sequentially.
  • The Others Segment has also increased on yearly basis but has sequentially shown negative growth.
  • The EBIT Mix of the company are provided in the table provided below:

Godrej Consumer- Segment-Wise Revenue

Godrej Consumer- Segment-Wise Revenue

Revenue Mix:

  • The company has reported a fall in contribution of India business in Revenue Mix of the company from around 59% In Q1FY21 to 57% in Q1FY22.
  • While the contribution of Indonesian Business to the revenue mix of the company has also decreased by 3% from 17% in Q1FY21 to 14% in Q1FY22.
  • The fall in contribution of the India and Indonesia business has been compensated by the growth of contribution of Africa business has risen by 5% from 19% in Q1FY21 to 24% in Q1FY22.
  • The contribution of the Other segment remains constant at 5%.

Godrej Consumer- Revenue Mix

Godrej Consumer- Revenue Mix

3) Q1FY22 Highlights:

  • Broad-based double-digit growth in both Home Care and Personal Care
  • Double-digit profitable sales growth of 24%; 2-year CAGR of 11%
  • Home Care delivers strong growth of 14%. Key Performance Drivers:
  • Household Insecticides: Strong performance; backed by successful innovation and full portfolios across formats and price points
  •  Air Fresheners: High growth on a low base; being discretionary, it should continue to witness gradual recovery
  • Home Hygiene: Scaling up a portfolio
  • Strong growth momentum in personal care, growth of around 29%.
  • Personal Wash and Hygiene: Growth led by strong performance in India
  • Hair Colours: High growth on a low base, witnessing recovery in India
  • Hair Care: Continued robust growth in Africa, the USA, and the Middle East
  • Strong growth across clusters except Indonesia; India 19%; Africa, USA & Middle East 60% (CC); Latin America & SAARC 48% (CC); Indonesia 0% (CC).
  • Gross Margin drop due to due to lag between the increase in input cost and end consumer price increases), mitigated partly through scale leverage in employee benefit expenses and other expenses.
  • Mr. Rahul Botadara has been appointed as the Company Secretary and Compliance Officer of the Company with effect from September 1, 2021.

4) International Business- Q1FY22 Highlights:

i) Indonesia:

  • Delivered sales growth of 0% (constant currency); 2-year constant currency CAGR of 3%
  • EBITDA margin at 23.4% marginally decreased by 20 bps year-on-year, despite scale deleverage.
  • Recovery was impacted by the second wave of COVID-19 and adverse macroeconomic factors.
  • Mixed performance in Home Care and Personal Care.
  • Meaningful scale-up of Hygiene portfolio under Saniter.
  • Recent launches scaling up well.
  • Launched no-ammonia NYU Henna Shampoo Hair Colour.
  • Continue to ramp up Project Rise (General Trade distribution expansion initiative); added ~10% retail outlets on a year-on-year basis.

ii) Africa, USA, and the Middle East:

  • Broad-based double-digit sales growth of 60% (constant currency); 2-year constant currency CAGR of 11%
  • EBITDA margin increased by 1170 bps year-on-year driven by scale leverage and cost-saving initiatives.
  • Strong sales growth momentum continues in Southern Africa and West Africa.
  • Seeding new go-to-market initiatives in key countries.
  • Goodknight Power Shots aerosol in Lagos, Nigeria continues to perform well
  • Continue to make inroads into the hair fashion market in the USA with the launch of the Darling brand in Target; encouraging response from Walmart.


Earnings Call Highlights:

Business Highlights:

  • The company had a strong start to the year delivering double-digit profitable sales growth.
  • Specifically, in quarter one, the company saw broad-based double-digit growth within the home care and personal care categories.
  • Overall sales grew by 24% with a two-year CAGR of 11%. EBITDA grew by 29%, with a two-year CAGR of 15%.
  • Homecare delivered a strong growth of 14% led by Household Insecticide. Air Fresheners continued to witness sequential recoveries. The overall category continues to face headwinds due to its discretionary nature. Our portfolio of home hygiene is scaling up well.
  • Return ratios continue to move up year-on-year while the net debt to equity ratio continues to come down.

Home Care Business:

  • The company believes Homecare has a very strategic portfolio for them, the entire hygiene space.
  • One of the most innovative products, Magic powder to liquid hand wash has been a big success, over the last 15 to 18 months, and the company will continue to invest in terms of creating awareness for the product, as well as creating stronger brand equity.
  • The rest of the portfolio beyond hand washes also is steady.
  • The whole cleansing range under brand ProClean and is also off to a good start.
  • In this space, the company is having a larger ambition of expanding the total addressable market strategy over the next four to five years in India.

Advertisement Expenditure:

  • A&P spends in India as a percentage of sales in Q1 they are hovering around 5% to 5.5%, which is relatively lower as compared to our average percentage to sales.
  • Fall in A&P spends is due to the following reasons:
  • In May the company has paused because of the second wave and a lot of uncertainty, so that has resulted in relatively lower A&P spends.
  • The other piece is to look at A&P spends aggregated with trade investments especially with customers' promos and more so, with the pricing investment, because the company is also taking calibrated price increases at this point, and not passing all input inflation to the end consumer.

Indonesia Business:

  • In Indonesia, because of the second wave, the company has seen a very high pickup in the hygiene space especially in Saniter.
  • The macroeconomic situation hasn’t been particularly strong.
  • The company strongly believes that its hygiene brand Saniter has been a big success and continues to do well.

Africa Portfolio:

  • Sequentially the major event for a drop of close to 100 bps margins in Africa is because of higher marketing investments.
  • Also, there is inflation pressure over there, but the company is mitigating it through pricing, and are also mitigating it through cost-saving programs, and the management believes that they are very much on track in terms of our desired margin, which will be higher on a Y-o-Y basis on a full-year basis.


  • The company launched, Goodness. Me, which is a digital-first brand, and the company have other brands also like Bblunt, which are very digital.

Input Price Inflation & Price Hike:

  • The input inflation is largely coming in from palm oil prices, as well as crude prices, which are upon a Y-o-Y basis.
  • The company continues to take calibrated price increases.
  • The overall price increase in India was close to around 4% to 5% in the last quarter.
  • And in categories, like Personal Wash and Hygiene, the price increases would be in high single-digit to even double digits.
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