Harsha Jethmalanimoneycontrol.com
Personal care products maker Godrej Consumer Products is confident of sustaining strong growth in hair colors segment.
Outlining the company's future outook at Kotal Institutional Equities' annual global investor conference, Chasing Growth 2014, the management indicated that it is confident of sustained growth momentum in the hair color portfolio despite heightened competition driven by significant penetration-led headroom for growth, strong product portfolio and new innovations.
Marico recentlt entered the hair color category by launching Livon conditioning cream colour priced at Rs 39 for the colour kit versus GCPL's similar offering priced at Rs 30.
It further added that Godrej Expert hair crème, launched in 3QFY13 and its hair powder color Godrej Expert Advanced continue to track good growth.
Soaps
In a bid to compensate for higher palm oil prices and the rupee depreciation, the FMCG major hiked soap prices 3-4 percent price, effective from January 2014. The managment is hopeful that recent price hikes in this segment will aid growth in the near term. Its brands include 'Cinthol', 'Godrej Fair Glow', 'Godrej No.1' and 'Godrej Shikakai' in soaps.
Home Insecticies (HI)
The management reiterated that poor HI performance in 3QFY14 was a one-off and it doesn't see structural issues within the category. 4QFY14 is seasonally the strongest quarter for HI and the management expects growth to recover. GCPL continues to gain market share in India and within formats, it added. The company's home insecticide products are available across formats, including aerosols, coil, mat, liquid vaporiser and gel. Its insecticides portfolio includes famous brands Goodknight and Hit.
GCPL's third quarter consolidated net profit grew 13.8 percent to Rs 195.7 crore compared to a year ago period, supported by higher revenues. Consolidated net sales rose 16.8 percent to Rs 1,978.8 crore from Rs 1,693.8 crore during the same period. Its operating profit margin declined 110 basis points to 15.5 percent due to higher expenses in the quarter gone by.
International business
While margins in Indonesia have taken a hit this year on multiple reasons including 60 percent wage hikes, 33 percent fuel price hike and 45 percent hike in LPG, the management expects FY2015 to see a modest recovery, aided by calibrated price hikes. It highlighted it may continue foods distribution in FY2015.
In Africa, with regards to hair care firm Darling, the management highlighted that its first priority is to increase stake from 51 percent to 100 percent in select core geographies and focus on expanding its geographic footprint for Darling. Recently the company acquired the remaining 49 percent stake in Nigeria. The company currently owns 65 percent of Darling's business.
GCPL had picked up a majority stake in Darling Group in June 2011 for USD 79.8 million. The deal was structured to allow Godrej the opportunity to acquire 100 percent in the African company after five years at a predetermined valuation.
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