Godrej Consumer Products Limited — Q4 FY26 earnings call

Call held 6 May 2026

Management summary

Godrej Consumer Products delivered a strong Q4 FY26 with 11% revenue growth and 10% EBITDA growth, driven by robust India performance. The company implemented a change in revenue reporting. While international businesses showed mixed results, management expects margin pressure in the near term due to input costs, but remains optimistic about long-term profitable growth and strategic initiatives.

Highlights

  • Consolidated revenues grew 11% in INR terms on the back of 6% underlying volume growth.

  • Consolidated EBITDA grew 10%, with operating margin at 21.7%.

  • India standalone business delivered 8% underlying volume growth and 10% sales growth, with EBITDA growing 18% and margins at 24.7%.

  • Home Care (India) delivered 12% value growth with strong momentum.

  • Africa, U.S.A. and Middle East business delivered 20% top line growth, and Latin America grew 26% in sales.

  • Fab portfolio achieved INR500 crores ARR (GSV) in Q4 and broke even, with a 'hypergrowth' market outlook.

Concerns

  • Profit growth has been weaker over the last 2 years due to significantly stepped-up investments.

  • EBITDA percentage margin is expected to be under pressure for the next 2 quarters due to crude oil prices (USD 100-110).

  • India Personal Care grew only 3%, with soaps muted, condom/sexual wellness declined, and powder hair dye under pressure.

  • Indonesia business delivered only 4% underlying volume growth and 3% sales growth, with market normalization expected from FY27.

  • Africa EBITDA grew only 2% despite 20% top line growth, reflecting a deliberate doubling of media spend.

Key financials

  1. Consolidated Revenue Growth 11%
  2. Consolidated Underlying Volume Growth 6%
  3. Consolidated EBITDA Growth 10%
  4. Consolidated Operating Margin 21.7%
  5. Consolidated Net Profit After Tax Growth 10%

What they filed

Q1 FY27: revenue up 9.7%, net profit up 2.3% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue2,301 2,262 2,161 2,330 2,390 +4%2,466 +9%2,360 +9%2,557 +10%
EBITDA559 513 494 502 520 −7%625 +22%588 +19%557 +11%
Net profit393 342 248 355 356 −9%383 +12%422 +70%363 +2%
How to read this

₹ crore, as filed. The percentage beside a figure is the change against the same quarter a year earlier — never the quarter before, which would make every seasonal business look like it collapses and booms each year.

Segment breakdown

  • India Standalone
    8% Underlying Volume Growth10% Sales Growth18% EBITDA Growth24.7% Margins
  • India Home Care
    12% Value Growth
  • India Personal Care
    3% Growth
  • Indonesia
    4% Underlying Volume Growth3% Sales Growth
  • Africa, U.S.A. and Middle East
    20% Top line growth2% EBITDA growth
  • Latin America and others
    26% Sales growth

Capital allocation

medium confidence
  • Capex Capex disclosed
    No, I think we are in the quest of product market fit and getting increasingly convinced we have it. We've set up a state-of-the-art plant in Nasik, and we've shipped our volumes from there.
  • M&A Muuchstac Acquisition · Integrated

    Part of strategy to expand skin cleansing business and leverage promising categories.

    We're doing extremely well on Magic handwash and now with Muuchstac we have an acquisition in face wash, which is also kind of very promising.
  • M&A PAKS (Raymond) Acquisition · Integrated

    Early successes in sexual wellness and good consistent volume growth on deodorants.

    I think we are also quite happy with PAKS, a little bit of, we had early successes in sexual wellness, which seem to have dried off but good consistent volume growth on deodorants.

Guidance & targets

Profitability

  • India Business EBITDA Margins Profitability · going forward · High confidence normative EBITDA margins
    Our India business is well placed to deliver continued calibrated growth as normative EBITDA margins, supported by improving demand trends.

    — Sudhir Sitapati

  • EBITDA Percentage Margin Profitability · next 2 quarters (3-4 months) · High confidence some pressure / lower
    This quarter and next quarter, I expect some pressure on EBITDA percentage margin... it may take 3 to 4 months again, of a little bit of a dip in percentage margins.

    — Sudhir Sitapati

International Business

  • Indonesia Operating Conditions International Business · FY 2027 · High confidence improve
    we continue to expect operating conditions to improve from FY 2027 as the market normalizes.

    — Sudhir Sitapati

  • Indonesia Volume Growth International Business · going forward · Medium confidence mid-single-digit
    So, I think what we will get in Indonesia is kind of mid-single-digit volume, high single-digit value going forward.

    — Sudhir Sitapati

Personal Care

  • Soaps Pricing Growth Personal Care · going forward · Medium confidence significantly going forward
    I think pricing growth will come into soaps pretty significantly going forward. So, I do expect this personal performance to improve.

    — Sudhir Sitapati

Fab Portfolio

  • Annualized Run Rate (ARR) Fab Portfolio · Q4 FY26 exit · High confidence INR500 crores (GSV)
    I think our ARR is about on GSV terms, about INR500 crores in quarter 4 and maybe INR450 crores in NSV terms.

    — Sudhir Sitapati

Household Insecticide

  • Growth Strategy (RNF molecule) Household Insecticide · over time · High confidence high single-digit
    we feel reasonably confident that from a kind of zero to low single-digit growth category household insecticide side is at least a high single-digit strategy. And over a period of time, can compound into a double-digit category.

    — Sudhir Sitapati

Taxation

  • Effective Tax Rate (ETR) Taxation · FY'27 · High confidence remain the same as this year
    So, the tax ETR is likely to remain the same as this year.

    — Aasif Huseini Malbari

Input Costs

  • Blended Inflation Input Costs · current · High confidence 7% to 9%
    I think we put that out in our result 7% to 9% is what we're seeing.

    — Sudhir Sitapati

Market context

  • Africa, U.S. and Middle East Revenue and Profit Growth International Business · medium term · High confidence double-digit
    Our Africa, U.S. and Middle East business continues to deliver on its stated objective of double-digit revenue and profit growth over the medium term.

    — Sudhir Sitapati

What to watch in Q1 FY27

Indonesia Operating Conditions & Growth

FY27 (starting Q1 FY27)
Current 4% underlying volume growth, 3% sales growth (Q4 FY26)
Target Improved operating conditions, mid-single-digit volume, high single-digit value growth

Why it matters

Indicates recovery and growth trajectory for a key international market.

we continue to expect operating conditions to improve from FY 2027 as the market normalizes.

Risks & concerns

  • Input Cost Inflation

    high

    Crude oil prices (USD 100-110) and palm oil prices (4,500 MYR CTO) are causing 7-9% blended inflation, leading to expected margin pressure for the next 2 quarters.

    Management acknowledged

  • Weather Dynamics (El Nino)

    medium

    El Nino predictions could impact Household Insecticides (difficult Q1) and soaps (generally good), creating volatility in category performance.

    Management acknowledged

  • Personal Care Underperformance

    medium

    Soaps and condom/sexual wellness categories have been muted, and powder hair dye under pressure, impacting overall Personal Care growth at 3%.

    Management acknowledged

  • Indonesia Market Normalization Timeline

    low

    While pricing pressures have bottomed out, full market normalization and improved operating conditions are expected only from FY27.

    Management acknowledged

Q&A highlights

7 direct
Personal Care performance in India Direct
Bulk of our personal care businesses is soaps and then market sectors are muted despite GST. So, while we have gained some market share, our growths have been muted in soaps. Condom sexual wellness also has been quite muted, and we've declined but it's a small business. And hair colour has had an okay quarter, not a great quarter, but an okay quarter.

Clarifies the mixed performance within the Personal Care segment, highlighting specific underperforming categories like soaps and condom/sexual wellness.

Asked by Vivek M

Indonesia turnaround and Africa outlook Direct
So, in Indonesia, I think even last quarter, we had about 4% volume growth. And this quarter also, we had 4% volume growth. In a steady state, if we can do 5% to 6% volume growth in Indonesia, this sales growth has to do with currency, that may turn actually in Q1, the other way around. So, I think revenue growth will now lead volume growth in Indonesia. So, I think what we will get in Indonesia is kind of mid-single-digit volume, high single-digit value going forward. As far as Africa goes, we are having a very strong performance in Africa.

Provides specific volume growth expectations for Indonesia (mid-single-digit volume, high single-digit value) and confirms strong performance in Africa, linking it to FMCG investments.

Asked by Vivek M

EBITDA margins outlook given inflation Direct
To be honest. This quarter and next quarter, I expect some pressure on EBITDA percentage margin, but we are seeing upside in a variety of other areas. We're seeing pricing growth higher than what we thought we get. We are seeing in certain categories like laundry and household insecticide, a lot of pressure on locals. So overall, I am expecting lower margins still this oil remains at 100, 110, but higher revenue and kind of netting out at reasonably good levels as far as EBITDA goes. And I think it's just - it just if this oil remains USD100 to USD110, that's what we expect and that to for a few months because it USD100, USD110 as we had spent in the pre-note is not something that we can't price up for over 3, 4 months.

Management confirms expected margin pressure for the next 2 quarters due to crude oil prices (USD 100-110) but also highlights offsetting factors like pricing growth and local competition pressure.

Asked by Mihir Shah

Fab portfolio ARR and profitability Direct
I think our ARR is about on GSV terms, about INR500 crores in quarter 4 and maybe INR450 crores in NSV terms. So, it's very, of course, internally look at our gross sales value is about INR500 crores. Is a very, very fast tailed brand. Every quarter is kind of doing better than the previous quarter. It's also kind of broken even in quarter 4. ... This is a INR4,000 crores market in India very rapidly. we've come from nowhere to becoming INR500 crores. And we feel this market is a hypergrowth market, and we have a lot to gain and very little to lose here.

Provides specific ARR for the Fab portfolio (INR500 crores GSV), confirms its profitability (broken even in Q4), and highlights the significant market opportunity (INR4,000 crores market).

Asked by Awais Bakshi

Personal Care strategy and marketing spend Direct
The biggest thing that we have to do is to look at the overall skin cleansing business. We're having a lot of green shoots on Cinthol body wash. We're doing extremely well on Magic handwash and now with Muuchstac we have an acquisition in face wash, which is also kind of very promising. So really, we have to change our lens from soaps to cleansing and look at the growth there.

Explains the strategic shift in Personal Care from focusing solely on soaps to the broader skin cleansing business, leveraging new acquisitions and successful products like Cinthol body wash and Magic handwash.

Asked by Aditya Vikhram

Impact of RNF molecule on HI categories Direct
But overall, it has worked, and we feel reasonably confident that from a kind of zero to low single-digit growth category household insecticide side is at least a high single-digit strategy. And over a period of time, can compound into a double-digit category. So, we do feel that the household insecticide problem that plagued us for 10 years is probably behind us.

Provides an update on the RNF molecule's impact, indicating it's working and can drive high single-digit to double-digit growth in household insecticides, potentially resolving a long-standing issue in the category.

Asked by Kunal Vora

Blended inflation for the company Direct
I think we put that out in our result 7% to 9% is what we're seeing. ... Let's just say a USD 100 to USD 105 Brent and 4,500 MYR CTO that's what we see.

Quantifies the current blended inflation rate the company is facing (7-9%), providing clarity on the magnitude of input cost pressures from crude oil and palm oil.

Asked by Nihal Jham

3 min read 7 chapters

Detailed narrative

Q4 FY26 Performance Overview

Godrej Consumer Products delivered a strong Q4 FY26, with consolidated revenues growing 11% in INR terms, driven by 6% underlying volume growth. Consolidated EBITDA increased by 10%, resulting in an operating margin of 21.7%. Net profit after tax also grew 10% on a reported basis, reflecting the underlying quality of earnings. This performance is fully aligned with the company's strategic priorities, focusing on category development and cost discipline.

Revenue Reporting Change

Effective Q4 FY26, Godrej Consumer Products implemented a change in its revenue reporting methodology. Certain customer-related expenditures, such as in-store visibility and display arrangements, are now netted off from revenue rather than being presented as separate operating expenses. This change, based on an Expert Advisory Committee opinion, has no impact on absolute EBITDA, PAT, or cash flow, but optically increases margin percentages due to a smaller revenue denominator.

India Business Performance

The standalone India business delivered an excellent quarter, achieving 8% underlying volume growth and 10% sales growth. EBITDA grew 18%, with margins reaching a healthy 24.7%. The Home Care segment was a strong performer, with 12% value growth driven by household insecticides, air fresheners, and fabric care. Personal Care, however, grew only 3%, with soaps gaining market share but other categories like condom/sexual wellness and powder hair dye facing muted or declining trends.

International Business Performance

International markets showed varied performance. Africa, U.S.A., and Middle East businesses delivered 20% top-line growth, though EBITDA growth was limited to 2% due to a deliberate doubling of media spend to build long-term franchise. Latin America and other regions saw 26% sales growth. In Indonesia, the business showed signs of stabilization with 4% underlying volume growth and 3% sales growth, with expectations for improved operating conditions and market normalization from FY27.

Input Cost & Margin Outlook

Management anticipates pressure on EBITDA percentage margins for the next two quarters (Q1 and Q2 FY27) due to elevated crude oil prices, which are expected to remain in the USD 100-110 range. The blended inflation rate for the company is currently 7-9%. However, the company expects to mitigate this through calibrated pricing actions and improved operating leverage, with a quicker recovery anticipated compared to past palm oil crises.

Personal Care & Soaps Strategy

Despite muted growth in some Personal Care categories, the company is strategically shifting its focus from solely soaps to the broader skin cleansing business. This includes leveraging successful products like Cinthol body wash and Magic handwash, and integrating recent acquisitions such as Muuchstac in face wash. Management expects pricing growth to significantly improve soap performance going forward, contributing to overall personal care growth.

Fab Portfolio Growth

The Fab portfolio achieved an Annualized Run Rate (ARR) of approximately INR500 crores (GSV) in Q4 FY26 and reached a break-even point. Management views this as a 'hypergrowth' market, with a potential market size of INR4,000 crores in India. The company is confident in its path to sustained profitability for this segment, despite potential short-term impacts from crude oil prices affecting laundry products in Q1.

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