Expect double-digit volume growth in FY20, says GCPL

Godrej Consumer Products Ltd (GCPL) stock is under pressure as it reacts to a weak set of Q3 earnings. The company's net profit and revenue came in below estimates but the big dampener was a mere 1 percent domestic volume growth.

Sharing his views and outlook going forward, Vivek Gambhir, managing director and CEO of the company, said, “On a two-year CAGR basis, the volume growth for the quarter was 10 percent that is very consistent with the kind of strong volume growth we have delivered in Q1 and Q3 ... our expectation would be to maintain and improve and drive to double digit volume growth in Q4 as well."

In terms of visibility of a stronger volume growth in FY20, Gambhir said, “In FY20, the focus clearly will be on driving our volume growth. Given the kind of innovations that we have recently launched along with new products that we are launching, our expectation would be to also look towards double-digit volume growth in FY20.”

Speaking about margins, he further mentioned, “In Q3, in India business, we have delivered a very healthy expansion in EBITDA margins. We did see some temporary blip in gross margins in Q3 driven by some increases in input costs and some rupee translation and devaluation impact ... now that the input cost particularly crude seems to be more benign, we do expect to be able to continue to drive profitable growth in Q4 and in FY20.”