GCPL shares tumble 10% on weak commentary; HUL, Tata Consumer Products, too, slide up to 4%

The company said that the demand conditions in India have been subdued for the past few months, which is evident in FMCG market growth.

Further, GCPL added that the weather conditions have not been supportive (delayed winters in the North and cyclones in South India) to the Home Insecticides (HI) segment, contributing ~1/3rd to its standalone business.

This has impacted HI category growths in the current quarter.

It also said that the current inflationary environment has created pressure on the margins.

"The company maintains its commitment to strategic investments in media and other areas like rural van distribution, etc., despite these challenging conditions. However, due to the confluence of factors discussed above, we anticipate a temporary downward breach of the normative margins this quarter," GCPL said.

Reacting to the update, other FMCG companies' shares, too, tumbled in the trade.

The BSE FMCG index was trading 1.89% lower at 20,770.71 levels.

For the second quarter ending September 30, 2024 (Q2 FY25), FMCG major Godrej Consumer Products reported a 13.52% rise in its consolidated net profit to ₹491.31 crore, helped by volume growth in the domestic market and Indonesia.

Revenue from the sale of products of the Godrej Group FMCG arm grew 2.2% to ₹3,647.11 crore during the quarter under review. It was ₹3,568.36 crore in the corresponding period last fiscal.

Its Managing Director and CEO Sudhir Sitapati had said: "GCPL has had a steady quarter given the headwinds of oil costs and tough consumer demand in India. Our standalone business grew by 7% in both volume and value and flat reported EBITDA."