Godrej Consumer Products (GODREJCP) Q4 04/05 earnings summary

Executive summary

• FY 2004-05 net sales rose 15% to Rs. 562.7 crore; PAT increased 33% to Rs. 86.1 crore, while net profit after prior-year tax adjustments was Rs. 89.6 crore.

• Operating PBIDT grew 21% to Rs. 106.9 crore, with PBIDT margin improving to 19% from 18.1%; EVA increased 47% to Rs. 78.8 crore.

• Growth reflected stronger soap and hair-colour sales, wider distribution, new products and operational efficiencies; Baddi’s second soap line was fully operational.

Financial highlights

• Net sales were Rs. 562.7 crore versus Rs. 489.7 crore; total income was Rs. 569.1 crore versus Rs. 493.8 crore.

• PBT rose 22% to Rs. 93.8 crore; PAT was Rs. 86.1 crore versus Rs. 64.9 crore. Prior-year tax adjustments added Rs. 3.5 crore, taking net profit to Rs. 89.6 crore.

• Godrej brand sales increased 14% to Rs. 528.7 crore; sales were net of excise duty.

• Advertising and sales promotion expense rose to Rs. 61.6 crore from Rs. 50.4 crore, supporting product launches and growth initiatives.

Outlook and guidance

• FY 2005-06 priorities include sustaining soap market-share gains, expanding Personal Care penetration and usage, innovating in skincare, hair care and liquid detergent, and improving margins.

• Management expected sector outperformance, supported by a strong product range, distribution, fully operational Baddi facilities, rising consumption and aspirations.

• Tax rationalisation and VAT were expected to support consumer disposable income, transparency, compliance and value; forward-looking outcomes remain subject to economic, tax, industry, litigation and labour changes.