Godrej Consumer Products expects gradual improvement in demand in upcoming quarters

Godrej Consumer Products on Monday said demand in the third quarter for this fiscal continued to be challenging, impacted by a general consumption slowdown, stressing that it expects gradual improvement in consumer demand in the upcoming quarters. "During the quarter (ended December 31, 2019), we witnessed relatively mixed demand across some of our geographies of operations... In India, demand continued to be challenging, impacted by a general consumption slowdown," Godrej Consumer Products (GCPL) said in a filing to BSE.

Despite weak demand conditions, we continued our marginally higher than mid-single-digit volume growth trend during the quarter," it added. The uplift in volume growth, it said, was led by a gradual recovery in household insecticides, new product launches, effective marketing campaigns, and tactical consumer offers.

The sales value growth also mirrors the trend of the past few quarter's sales value growths. "We look forward to a gradual improvement in consumer demand in the quarters ahead driven by a good monsoon and government stimuli," it added.

In Indonesia, the company recorded close to high single-digit constant currency sales growths, amidst an improving demand environment in the home and personal care space. The growths, it said, are driven by new product launches and gradual expansion of general trade distribution (project rise).

"In GAUM (Godrej Africa, USA, Middle East), we saw a good recovery with higher than mid single-digit constant currency sales growth, thus reversing the trend of the past few quarters," it said. The performance was driven by improved performance in South Africa and the rest of Africa and the Middle East cluster.

"We continue to drive scale-up of wet hair care and the relaunch of Darling brand in dry hair category along with expansion in distribution to deliver sales growth for the year," it added. Performance in SAARC countries was robust, it said.