Godrej Consumer Products (GODREJCP) Q4 16/17 earnings summary

Executive summary

• FY17 delivered competitive, profitable growth despite sluggish demand and geography-specific challenges; reported consolidated sales rose 10% and EBITDA rose 17% YoY, with market-share gains across core categories.

• Gross and operating margins expanded while brand and innovation investment continued; management said sales fell short of expectations and prioritised stronger top-line growth.

Financial highlights

• Consolidated revenue from operations was ₹9,608.80 crore vs ₹8,753.06 crore; profit after tax was ₹1,307.97 crore vs ₹830.62 crore.

• Consolidated profit before exceptional items, associate profit and tax was ₹1,686.23 crore vs ₹1,500.08 crore; reported EPS was ₹38.29 vs ₹24.30.

• FY17 exceptional items were a net gain of ₹0.08 crore vs a ₹333.51 crore loss in FY16; the prior-year comparison includes this material one-time loss.

• Consolidated EBITDA was ₹1,913 crore, up 17% YoY; India EBITDA growth exceeded sales growth, supported by premiumisation and cost optimisation.

Outlook and guidance

• Demand was expected to pick up in FY18 after signs of post-remonetisation recovery; timely GST implementation was viewed as a potential consumption and GDP catalyst.

• Medium- to long-term growth confidence rested on emerging-market opportunities, increased category penetration and new distribution channels; priorities included bolder innovation and stronger go-to-market execution.

• Hair care for women of African descent represented almost 20% of revenue, with an ambition to double that contribution within four years.

• Strength of Nature products were planned for localised manufacturing and relaunch in Africa later in 2017; wet hair care portfolio expansion was a strategic focus.