Godrej net profit up 13%

Fast moving consumer goods firm Godrej Consumer Products (GCPL) reported a 13 per cent growth, below analyst expectations, in net profit to Rs 41.47 crore for the quarter ended December 2007, from Rs 36.63 crore in quarter ended December 2006.

The company's net sales grew y-o-y to Rs 229 crore in the third quarter of this year, from Rs 197.6 crore in the previous quarter of last year, an increase of 15 per cent.

The company has been facing pressure due to high input costs as the price of vegetable oil, a key raw material used in the manufacture of soaps, is on the rise and high competition in key categories.

The management was unavailable for comment due to the ongoing rights issue by the company, which prohibits companies to speak until the end of the issue.

Soap sales, which contribute 59 per cent to GCPL's sales mix grew by 26 per cent y-o-y to Rs 134.1 crore in the third quarter, from Rs 106.7 crore in the previous quarter.

Among the key initiatives taken by the company this quarter include launch of 100 gram variants of its soaps brands and undertaking a price hike of 6 per cent.

Its hair colour business, which contributes 22 per cent to the company's sales mix, went up by 6 per cent and toiletries sales went up by 6 per cent, however, liquid detergent sales fell by 6 per cent.

GCPL's return on capital declined to 62 per cent in the third quarter from 64 per cent in the previous quarter y-o-y. The market share of the company in soaps for the third quarter stood at 9.7 per cent, marginally above its market share in the previous quarter y-o-y at 9.2 per cent.

The company, however, had gained market share in the first two quarters this year at 10.2 per cent but lost some of it by the third quarter.

Its advertising expenditure was up by 22 per cent.

The company's consolidated net profit for the third quarter grew by 8.7 per cent to Rs 430.2 crore from Rs 395.6 crore.

Consolidated net sales grew by 14.5 per cent to Rs 272.7 crore in the third quarter of this year, from Rs 238 crore in the previous comparable quarter. Its total consolidated income stood at Rs 274.2 crore, up 14.3 per cent from Rs 239.7 crore in the previous quarter.

From its international operations, total income from Keyline Brands in UK went up to Rs 27.5 crore in the third quarter this year, from Rs 25.8 crore in the previous comparable quarter and net sales of Rapidol in South Africa went up marginally to Rs 14.6 crore in the quarter ended December 2007, from Rs 14.5 crore in the quarter ended December 2006.

GCPL's nine months standalone net profit figure stood at Rs 110.9 crore, up by 18.9 per cent from Rs 93.2 crore in previous quarter and total income at Rs 680.3 crore, up by 18.2 per cent from Rs 575.3 crore in the previous comparable quarter.

The consolidated nine month net profit for the company grew by 14.9 per cent to Rs 118.4 crore from Rs 103 crore last year and total income Rs 837.1 crore, up by 17.4 per cent from Rs 712.8 crore in the quarter ended December 2006.