Covid-hit, GCPL Q4 sales fell 18% to Rs 1,089 crore; volumes drop 15%

MUMBAI: (GCPL) reported a 25% decrease in net earnings without exceptional items at Rs 222 crore in the fourth quarter ended March 31, 2020. India's net sales decreased by 18% to Rs 1,089 million rupees, with internal volumes falling 15% annually year.

Household insecticides decreased by 16% due to lost sales in the latter part of March 2020, marking the start of high mosquito infestation, while soaps decreased by 23% due to lost sales in the last fortnight of March 2020 due to the impact of the Covid-19 outbreak. On the other hand, hair colors performed poorly on the back of the general slowdown in the hair color category due to their discretionary nature and consumers stretching their consumption.

GCPL President Nisaba Godrej said the quarter was an unprecedented period due to the spread of the Covid-19 pandemic worldwide, which impacted all geographies of the company's operations. During this quarter, we witnessed constant demand in our categories until mid-March 2020. However, the spread of the virus and the eventual closure in many geographies of our operations resulted in virtually no sales in the latter part of March 2020, significantly impacting our sales performance in the quarter. This resulted in weak performance in our business in India, although we have continued to gain market shares in all categories, Godrej said.

In GCPL's international business, Indonesia continued its strong growth momentum with steady profitable growth in single-digit currency sales despite the Covid-19 crisis. Godrej said this was driven by consistent performance across all categories and various market launch initiatives. At GAUM (Godrej Africa, USA, Middle East), on the other hand, GCPL witnessed weak sales performance amid disruptions caused by Covid-19 in many of its countries of operations.

Going forward, we are increasing our operations and supply chain distribution, in line with prescribed security measures and reducing blockades in several countries. Since the situation is very dynamic, our teams continue to manage our business wisely, while evaluating various scenarios for business recovery. We will continue to focus on boosting our market share and launching relevant innovations to improve our competitiveness. The situation requires an extraordinary level of adaptability, endurance and agility, and our teams are well prepared to take on this challenge, Godrej said.

Analysts said this was the weakest performance in consumer staples after the impact. While Hindustan Unilever volumes fell 7% in the fourth quarter, Marico volumes decreased 3%. Nestlé India, on the other hand, witnessed high single-digit growth.