Godrej Consumer's Q2 volume growth highest in last five quarters, says CEO
While Godrej Consumer's revenues missed estimates, volumes and EBITDA came in-line with expectations and international business surprised positively with a strong performance.
Godrej Consumer reported a mixed quarter. While revenues missed estimates, volumes and EBITDA came in-line with expectations and international business surprised positively with a strong performance. MD and CEO Vivek Gambhir said the company is pleased with the 7 percent volume growth in Q2—highest in the last five quarters.
It is encouraging to see that the volume growth was broad-based across categories, he said. It has been driven by innovation and distribution, said Gambhir in an interview with CNBC-TV18. Going forward, hopeful that the company will strive for high single-digit volume growth.
Rural volume growth was only marginally ahead of urban. Typically, rural growth is 1.4-1.5 times that of urban, and so in that sense, rural has been a challenge, but hopeful that from January onwards there will be an uptick in rural FMCG growth, he said.
When asked about impact on margins due to promotions, he said volume growth of 7 percent was on low single-digit value growth. “The priority in near-term is on driving volume growth. Margins are already quite high, so there is enough room to sustain this strategy but going forward will strive to drive higher volume growth through better portfolio mix and more premiumisation,” said Gambhir, adding that going forward there would be less intensity in promotions in the soap category.
With regards to prices, he said they have not taken any specific price cuts in soaps category last quarter but have been cutting prices over the last 3-4 quarters. Effective price cut in soaps has been in the range of 15-20 percent, he said.
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