BENGALURU (Reuters) – India’s Godrej Consumer Products on Tuesday reported a sharper-than-expected drop in second quarter profit, as expenses climbed, while Indonesia sales continued to decline.
Profit for the three months ended Sept. 30 was 3.59 billion Indian rupees ($44.01 million), compared with 4.79 billion rupees a year ago, the company said in an exchange filing.
Analysts on average had expected a profit of 4.11 billion rupees, according to IBES data from Refinitiv.
Consumer goods makers across the globe have been reeling under inflationary pressure due to lingering pandemic-led supply crunches, while a spike in raw material costs fueled by Russia’s invasion of Ukraine added to their woes.
Godrej Consumer’s total expenses climbed 14.4% to 29.51 billion rupees, while earnings before interest, taxes, depreciation and amortization declined 15%.
The decline was due to increased marketing spends, higher costs and weak demand in Indonesia, Latin America and a few South Asian countries, Managing Director Sudhir Sitapati said in a statement.
The maker of Cinthol soaps and Goodknight mosquito repellents has been struggling in Indonesia, a key market, over the last few quarters amid macroeconomic challenges made worse by stubbornly high inflation and intense competition.
Hygiene products suffered a knock in Indonesia as the pandemic-led demand started fading, leading to an 11% drop in constant currency sales.
Meanwhile, sales in India grew 8%, driven by price increases that led to a 5% drop in volume.
“With inflationary pressures abating,” Sitapati said he now expects volumes to return to growth in the short term.
Overall revenue from operations climbed 7.2% to 33.92 billion rupees.
Constant currency sales in the Africa, United States and Middle East cluster grew 13% on the back of expansion in consumer goods business.
Shares of the company closed marginally lower on Monday. Indian markets were shut for a holiday on Tuesday.
($1 = 81.5690 Indian rupees)
(Reporting by Akansha Victor in Bengaluru; Editing by Dhanya Ann Thoppil)
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