GCPL forecasts high teens revenue growth despite commodity headwinds

MUMBAI: Growth may be gathering pace, but rising costs are still trying to steal the spotlight. Godrej Consumer Products Ltd. (GCPL) expects to post high-teens consolidated revenue growth for the first quarter of FY27, powered by robust volume expansion across India and international markets, even as elevated commodity prices continue to squeeze profitability.

In its quarterly business update, the FMCG major said consolidated revenue is expected to grow in the high teens, supported by high single-digit underlying volume growth. However, higher crude oil and raw material prices are likely to keep margins under pressure, with consolidated EBITDA expected to remain within the company’s double-digit guidance.

The company’s India business is set to deliver double-digit revenue growth, driven by high single-digit underlying volume growth, with demand remaining broad-based across its portfolio.

International operations also maintained strong momentum during the quarter. Indonesia, one of GCPL’s key overseas markets, recorded mid-teens revenue growth, backed by double-digit underlying volume growth as competitive intensity eased and the company continued to gain market share across categories.

“We believe the business is back on a profitable growth journey,” the company said, reflecting growing confidence in the Indonesian market.

The Godrej Africa, USA and Middle East (GAUM) business also delivered another strong performance, reporting strong double-digit sales growth with underlying volume growth in the teens. According to the company, the expansion was broad-based across both product categories and geographies.

On the cost front, GCPL acknowledged that commodity prices remained elevated through most of the June quarter, in line with its earlier guidance. However, it noted that input costs began easing during the closing weeks of the quarter, offering some relief.

To offset the impact of higher costs, the company optimised its media spending during the quarter while continuing to invest behind growth. It expects margins to recover progressively over the remainder of the financial year as commodity pressures moderate.

Despite the near-term profitability challenges, GCPL reaffirmed its full-year outlook, saying it remains on track to achieve its FY27 guidance and could even outperform on select metrics.

With demand staying resilient across markets and input costs beginning to soften, GCPL is entering the new financial year with revenue growth gathering pace even if margins still have a few hurdles to clear.