Godrej Consumer Products Expects Mid-Single Digit Growth in Q2FY26 Amid GST Transition

Mumbai, October 8, 2025: Godrej Consumer Products Ltd (NSE: GODREJCP, BSE: 532424) has projected mid-single digit consolidated revenue growth in the quarter up to September 30, 2025 (Q2FY26) as the firm unwinds short-term trade flows after the recent GST rate reduction.

Domestic Performance Impacted by GST Transition

The government’s GST reforms reduced the tax on nearly one-third of Godrej Consumer’s portfolio, from roughly 18% to 5%, on products such as soaps, talcum powders, shampoos, and shaving creams. It was passed on by the company to consumers on September 22, 2025.

However, the transition triggered temporary destocking among distributors and retailers, causing delays in new orders and customer purchases. As a result, the standalone business is expected to achieve mid-single-digit value growth, supported by low-single-digit underlying volume growth (UVG).

Godrej Consumer Products Limited (GCPL) recorded mixed performance patterns in its major segments for the latest quarter. The Home Care segment is forecasted to achieve high single-digit value growth, aided by robust category movement. Conversely, the Personal Care segment is expected to experience a low single-digit decline, primarily due to the impact on the soap category. The standalone business from the company is forecasted to reflect mid-single-digit growth, although GST-based disruptions seasonally impacted performance in the quarter.

International Business Performance

Godrej Consumer Products Limited (GCPL) recorded varied performance across its global markets in the quarter. In Indonesia, heightened price competition led to a low single-digit decline in value, although underlying volume growth (UVG) remained positive, reflecting resilient demand. Conversely, the GAUM region—comprising Godrej Africa, the USA, and the Middle East—continued its strong momentum, marking the third consecutive quarter of double-digit growth in both volume and value, driven by robust consumer demand and effective market execution.

Profitability Outlook

Although near-term volumes are impacted by GST rationalization, the company’s structural advantages support sustainable, long-term growth. Q2FY26 EBITDA margins are expected to moderate due to one-time channel transitions, while profitability is projected to improve in the second half of the fiscal year.

Strategic Commentary

The management is optimistic that the tax reform will enhance affordability, drive market expansion, and facilitate a recovery in consumer demand over the next quarters.

REF: https://nsearchives.nseindia.com/corporate/GODREJCP_07102025193336_GCPL_Pre_Quarter_Note_Q2-Signed.pdf

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