Godrej Consumer Products – Lower market share in winter

January 25, 2010 · Author: · Category: conference call 

Godrej Consumer Products indicated that its lack of glycerine soap does not allow it to enjoy stronger market share in winter. Hence, it lost a 40-bp market-share qoq. Its recently launched moisturising soap is expected to drive growth in winter.

Though palm oil prices continue to trend upwards (and are now up 51% yoy), GCP pointed out that the forward cover would allow it to improve margins, and will not compel it to hike prices. It indicated it has
such cover till Apr 10.

The expanded distribution network has been pushing revenue up. Of
revenue growth, 39% came from the expanded distribution network. GCP added 6,200 villages in 9mFY10.

Lack of any price hikes would result in reducing total revenue growth but that volume growth would be strong. It is not in a hurry to hike prices as it has forward cover and will not be affected by any excise rollback. (Almost 100% of its production comes from excise-exempt locations.)


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