GCPL expects price-driven sales growth in domestic market in Q4/FY22

New Delhi: FMCG maker Godrej Consumer Products Ltd (GCPL) expects to deliver a ''close to double-digit sales growth'' in the domestic market in the January-March quarter driven entirely by pricing.

Overall, short-term challenges such as unprecedented global commodity inflation and the performance of its Indonesia business, continued to play out during the quarter, impacting consumption and margins, the company said.

At a consolidated level, the company expects to deliver a ''higher than mid-single-digit sales'' growth and ''lower year-on-year EBITDA margins'' on the profitability front, during the January-March quarter.

''This is due to input inflation and our weak performance in Indonesia,'' said GCPL is a quarterly update for 4Q FY22.

The Godrej group firm has also raised concerns over higher inflation levels, leading to successive price increases, and impacting volumes of the Indian FMCG industry.

''The Indian FMCG industry witnessed a consumption slowdown over the last few months. The sector continued to be hit hard by higher inflation levels, leading to successive price increases, and impacting volumes,'' said GCPL on Wednesday.

Despite this, GCPL has gained market share in 85 percent of the portfolio, it added.

''In India, we expect to deliver close to double-digit sales growth, driven entirely by pricing. Our 2-year CAGR would be in the early twenties,'' said GCPL in updates shared on stock exchanges on Wednesday.

On various segments, GCPL said the Personal Care segment sustained its double-digit growth trajectory, primarily led by pricing in Personal Wash.

While over Home Care, GCPL said it has witnessed a ''soft performance'' on a high base, impacted by a relatively muted season for Home Insecticides and the discretionary nature of Air Fresheners.

While talking about the international business, GCPL said in Indonesia, that the company expects a ''sales decline in the high teens'' in constant currency terms, with the Hygiene segment performance waning after COVID-19.

''We expect to deliver a constant currency sales growth close to the mid-teens. We also continue to focus on driving sustainable, profitable sales growth. We expect strong double-digit constant currency sales growth in our Latin America business,'' it said.

Its SAARC business performance was soft, it added.

''At a consolidated level, we continue to leverage our category and geographic portfolio. We expect to deliver a higher than mid-single-digit sales growth and a 2-year CAGR around mid-teens,'' said GCPL.

Over the outlook for FY23, GCPL said:''We expects to deliver early double-digit sales growth''.

The quarterly update for 4Q FY22 provides an overall summary of the operating performance and demand trends during the quarter ended March 31, 2022.

''This will be followed by a detailed performance update, post the approval of the 4QFY22 financial results by the Board of Directors,'' the company said.