Godrej Consumer Products Limited

Q2 FY27 Financial Performance

Godrej Consumer Products Limited (GCPL) held its Q2 FY27 earnings conference call on October 29, 2026, at 5:00 PM IST. The company reported strong broad-based performance with consolidated revenues growing 19% year-on-year (15% in constant currency terms) with underlying volume growth of 8%. EBITDA grew 12% and net profit increased 14% to INR523 crores. This marks the second consecutive quarter of high teens revenue growth with high single-digit underlying volume growth and double-digit profit growth.

India Stand-alone Business Performance

The India stand-alone business delivered 13% sales growth driven by 7% underlying volume growth, despite an estimated 150 basis points impact from trade inventory correction in the quarter. Management stated that maintaining healthy channel levels is important for operational excellence. Stand-alone EBITDA was mildly impacted due to this correction.

Category-wise Performance

Home Care: Delivered 19% value growth led by strong performance in air fresheners and home care liquids. The company gained market share in Household Insecticides. The electric portfolio showed sequentially improving performance supported by the new "6 minutes" campaign. Godrej Fab maintained strong double-digit growth and strengthened its market position. Godrej Spic, scaled nationally during Q1, witnessed healthy consumer repeat and sequential growth. During the quarter, the company launched Godrej Rizz in selected markets across West and South India and Godrej Zap (stain remover) online, both receiving positive consumer response.

Personal Care: Delivered value growth of 8%. Soaps remained stable despite significant price increases and grammage reduction, although with a favorable comparator. Premium liquids performed well, with Cinthol body wash scaling sequentially and Muuchstac face wash progressing beyond business plans. Hair colors maintained growth momentum and gained market share. Perfumes and deodorants delivered strong double-digit growth supported by healthy underlying volume growth in deodorants and continued momentum in perfumes and EDP.

International Business Performance

Indonesia: Sales grew 20% with underlying volume growth of 8%. EBITDA grew 12% despite LPG prices doubling. The business benefited from El Nino tailwinds leading to increased mosquito infestation. The future portfolio including LV and Pocket showed tremendous success with double-digit underlying volume growth sustained.

GUAM (Africa): Delivered another outstanding quarter with sales growth of 40% in INR terms (23% constant currency) supported by underlying volume growth of 16%. EBITDA grew 43%. The performance was broad-based across categories and geographies. GUAM has now delivered 7 consecutive quarters of double-digit top line growth and 11 consecutive quarters of double-digit bottom line growth. The launch of HI incense stick was well received with good early traction.

Input Cost Environment and Margin Management

The input cost environment remained significantly challenging through the quarter with inflation intensifying across crude-linked derivatives, palm oil, and commodity inputs. This represented one of the highest inflationary impacts in recent years. The impact of such inflation has been approximately high single digit due to the nature of the portfolio in India and Indonesia.

The company has taken stringent pricing actions combined with large cost savings programs and media and trade level investment optimization. Digital investments have provided higher ROI. The company will continue to take calibrated pricing actions significantly in soaps and liquid detergents, where the cost impact is large and margins remain below normative levels even today.

FY27 Guidance and Outlook

Management reaffirmed FY27 guidance for high single-digit underlying volume growth in stand-alone India business and double-digit revenue and EBITDA growth at consolidated level. With revenues running ahead of plan through the first half, the company remains on track to deliver with confidence to exceed guidance in certain areas. The measure of outperformance remains double-digit underlying volume growth and profit growth.

Management Transition and Strategic Initiatives

Regarding the recent management transition, the company is focusing on building digital advertising capabilities to reach top percentile performance over the next few quarters. The company is making decisive shifts toward operational excellence, including trade inventory corrections to ensure sales teams focus purely on offtake.

The process to appoint an India CEO is ongoing, with emphasis on finding the right person aligned with Godrej values and entrepreneurial mindset. No specific timeline was provided, emphasizing the importance of getting the right candidate.

Product Launch Updates

Godrej Spic (toilet cleaner) has been scaled nationally after successful milestones and consumer repeat in Tamil Nadu. For pet care, the company is still in learning phase with initial product acceptance observed, with more detailed updates expected next quarter.

Commodity Outlook and Margin Perspective

Commodity inflation is expected to be mildly higher in Q3 FY27 compared to Q2 FY27. The company focuses on pricing for profit growth (EBITDA year-on-year) rather than margin percentages. The broad shape of delivered performance is expected to continue, with double-digit EBITDA growth targeted at consolidated level.

Category Growth Sustainability

Management expressed confidence in sustaining growth trajectories across categories. Detergents continue to benefit from formalization of industry and shift from powders to liquids. Household Insecticides season looks fine despite El Nino impacts being more pronounced in first half. The company expects to sustain trend lines on growth.

Advertising Spend Trends

India stand-alone advertising spend has declined for 7 consecutive quarters due to two factors: category spending reductions in soaps and detergents due to inflation, and optimization efforts delivering better reach at lower cost through improved practices and agency collaboration. The company maintains target share of voice levels.

International Business Sustainability

In Indonesia, a few basis points of growth are attributed to better weather conditions (El Nino), but the company has multiple levers to sustain double-digit volume growth. For GUAM, the growth is structural and broad-based across categories, supported by organizational bandwidth, execution muscle, and product expansion opportunities. Capacity expansions are planned to address high utilization constraints.