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Godrej Consumer: Favourable input costs scenario continues - Views on News from Equitymaster
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  • Oct 30, 2015 - Godrej Consumer: Favourable input costs scenario continues

Godrej Consumer: Favourable input costs scenario continues
Oct 30, 2015

Godrej Consumer Products (GCPL) declared results for the quarter ended September 2015. The company's consolidated revenues were up by 9% YoY during the quarter, while profits grew by 24% YoY. Here is our analysis of the results:

Performance summary

  • Consolidated revenues rise by 9% YoY led by a strong volume growth across markets. Domestic business grows by 10% YoY, while the international business expands by 15% YoY (in constant currency terms).
  • Operating profits rise by 19% YoY as margins expand to 18.1% as compared to 16.6% reported in same period of last year. Margin expansion led by lower input costs (as a percentage of sales).
  • Profit before tax rises by 14% YoY while net profits rise by 24% YoY. A strong operating performance coupled with lower tax outgo are key factors for same.
  • Company declares second interim dividend of Rs 1 per share of face value of Rs 1.

Consolidated financial performance

(Rs m) 2QFY15 2QFY16 Change 1HFY15 1HFY16 Change
Net sales 20,601 22,449 9.0% 39,486 43,426 10.0%
Expenditure 17,186 18,377 6.9% 33,654 36,200 7.6%
Operating profit (EBDITA) 3,415 4,073 19.2% 5,833 7,226 23.9%
EBDITA margin (%) 16.6% 18.1%   14.8% 16.6%  
Depreciation 227 241 6.3% 448 477 6.4%
Amortisation 132 132 0.0% 264 264 0.0%
EBIT 3,056 3,699 21.0% 5,121 6,485 26.6%
EBIT margin (%) 14.8% 16.5%   13.0% 14.9%  
Interest 254 250 -1.6% 508 516 1.5%
Other income 346 191 -44.9% 620 359 -42.1%
Exceptional items (39) (88) 124.4% (239) (222) -7.1%
Profit before tax 3,109 3,553 14.3% 4,994 6,107 22.3%
Tax 718 723 0.7% 1,161 1,285 10.7%
Effective tax rate 23.1% 20.3%   23.3% 21.0%  
Profit after tax/(loss) 2,391 2,830 18.3% 3,833 4,821 25.8%
Minority interest/ Share of associate company (178) (91)   (317) (221)  
Net profit after tax 2,213 2,739 23.8% 3,516 4,600 30.8%
Net profit margin (%) 10.7% 12.2%   8.9% 10.6%  
No. of shares (m)       340.4 340.5  
Diluted earnings per share (Rs)*         30.4  
Price to earnings ratio (x)         42.5  

(*On a trailing 12-month basis)

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