Ladies and gentlemen, good day, and welcome to Godrej Consumer Products Limited Q3 FY26 earnings conference call. As a reminder, all participant lines will be in the listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes.

Should you need assistance during the conference call, please signal an operator by pressing star and then zero on your touch-tone phone. Please note that this conference is being recorded.

I now hand the conference over to Mr. Vishal Kedia.

Thank you, and over to you, sir. Good evening to all.

We are happy to welcome you to the investor and analyst conference call for Godrej Consumer for quarter three FY26. Today we have with us Sudhir Sitapati and Aasif Malbari.

We will start with opening remarks from Sudhir, post which we will move to the Q&A. I now hand over to Sudhir for his opening remarks.

Good evening. Q3 FY26 has been a quarter of strong broad-based performance for Godrej Consumer Products Limited, fully aligned with our expectations and strategic priorities.

Our results demonstrate our belief in our goodness manifesto of driving market development and simplifying our business. At a consolidated level, we had growth across all key financial metrics.

Revenues grew 9% in INR terms, underpinned by a healthy 7% underlying volume growth. EBITDA expanded by 16%, with margins reaching 21.6%.

Our net profit before exceptionals grew by 14%, underlining the quality and sustainability of our earnings growth. Our standalone India business delivered excellent performance driven by high-single-digit underlying volume growth of 9%.

EBITDA margins stood at a healthy 24.8%, supported by favorable input costs, disciplined cost management, calibrated pricing actions, and improved operating leverage. I think the few quarters that we had of margin challenges is probably behind us.

Sales grew 11% with an underlying volume growth of 9%, aided by a supportive base and robust in-market execution. In Home Care, we delivered 12% value growth led by strong performance in air fresheners and fabric care, alongside continued market share gains in household insecticide, driven by our superior RNF-based formulations.

We continue to expect similar share gains going forward. Personal Care witnessed a meaningful recovery, growing 7% with soaps demonstrating a positive trajectory, supported by improving affordability following the GST reduction and stable commodity prices.

As guided earlier, margins have returned to normative levels, and we expect this trajectory to sustain through Q4 FY26. I am pleased to confirm that our acquisition of Muuchstac was successfully completed on 10th November, with operations now fully live and performance on plan.

This strategic addition strengthens our portfolio in the fast-growing men's face wash segment and positions us well to capture emerging opportunities in this space. Our international portfolio demonstrated resilience amidst a mixed operating environment.

In Indonesia, while pricing pressures persist, we are encouraged by early signs of stabilization. The business delivered a stable UVG of 5%, led by shampoo hair colour, baby care, and with market share gains across all categories.

Revenue was flattish, adjusting for the one-off changes in distribution adjustment. Encouragingly, profitability improved by close to 100 bps over the same period last year.

We expect recovery to start meaningfully from FY27 as market conditions normalize. Our Africa, USA, and Middle East, GAAM, business delivered outstanding results with sales growth of 19% in INR terms.

EBITDA grew 18%, led by strong performance in hair fashion and air fresheners. The launch of Air Pocket has resonated strongly with consumers across these markets, reinforcing our innovation-led growth strategy.

For the year, we remain confident of achieving high-single-digit revenue growth at a consolidated level. Our India business is expected to deliver continued growth performance while holding normative EBITDA margins in the coming quarter.

GAAM continues to perform well and deliver on its stated objectives of double-digit revenue and profit growth for the year. At a consolidated level, while temporary macroeconomic and pricing pressures in Indonesia and LATAM may have moderated the full-year EBITDA growth, we remain confident of a robust exit trajectory and sustained profitability momentum into FY27.

As our execution momentum builds, our unwavering focus on category development, cost discipline, and operating excellence continues to translate into improving performance. With strengthening demand trends, consistent portfolio actions, and a clear strategic road map, we are increasingly confident in our ability to deliver sustained profitable growth and create long-term value for all stakeholders.

Thank you very much.

Sir, should we open the floor for questions?

Yes.

Yes.

Perfect. Thank you very much.

We will now begin with the question-and-answer session. Anyone who wishes to ask a question may press star and then one on their touch-tone phone.

If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question.

Ladies and gentlemen, we will wait for a moment while the question queue assembles. Again, to register for a question, please press star and one.

Our first question comes from the line of Abneesh Roy from Nuwama. Please go ahead.

Thanks. Congrats on recovery in India business.

My first question is on your two new businesses. First is on pet food.

You had entered around 8 months back in Tamil Nadu. If you could tell us how the progress has been?

We are seeing many companies show interest here. Reliance Consumer plans to be aggressive here with 20%-40% lower pricing.

How do you see the overall pricing behavior in this industry medium, long term? In Tamil Nadu, how has been the progress and any other states you plan to enter?

That is the first question.

I think, Abneesh, see, we basically launched a test market in Tamil Nadu. As we speak, we have got a plant ready now in Nashik, which is ready to go.

I think in Tamil Nadu our results have been mixed. We've had some success in terms of consumer traction, distribution, etc.

I don't think we're still at a position where we can say we've got the mix 100% right. This is a long game and we're willing to be patient and figure out where we should participate because what is clear to us is that this is a long game and a lot of value at the end of it.

We've understood a few things about this category. You must remember this is the first time we're entering this category.

I would still say that not much to report except that we are very persistent and very committed to building a big business here. Sudhir,

when you say mixed results, anything you want to change in terms of the positioning? Generally, we see Godrej Consumer being quite disruptive in a new category in terms of pricing or packaging.

Anything you want to tell us in terms of what is the reason for mixed results because clearly it's a good

I think the mixed results in the sense that we've got a market share which is a little lower than what I would have hoped for or wanted and what gives us confidence of success. Which means that the exact mix that we've got is not exactly right there, which is product, pricing, packaging.

We kind of launched with this promise of immunity. We've been pretty heavy on television.

We've got a pretty good salience. Our Google share of search is now in double digits in Tamil Nadu, good measures on mind measures.

Still I won't say that we've got that mix exactly right. The moment we feel we've got that, we'll let you know.

We're persisting with this and we're building capability patiently here. We've built a kennel.

We've built manufacturing capability. We're building a sales team.

We're building a vet contact program. We're doing the basic.

This is going to be a slow burn for a few years and then I suspect it'll take off. I think we'll leave it there.

Understood. My second question is on Muuchstac.

If you could tell us what will be your FY27 target? On the other new business of Raymond, how has been the progress in the two subsegments?

I think on Muuchstac, it's probably not proper for us to give a target for Muuchstac, probably just to reinforce the rationale for Muuchstac, which is Muuchstac is very focused on a single SKU in face wash, having pretty rapid growth coming from just one or two channel partners, and having a very high EBITDA margin. I feel that with Godrej's capability across other channels, both in e-commerce, modern trade, and even in general trade, this should give us pretty disruptive growth numbers.

It is hard to say exactly what. That business is ₹70-odd crore.

The total size of the market in men's face wash is ₹1,000-odd crore, growing at 20%. I would say, whatever happens, this acquisition does look like a pretty good deal at a good price.

We will kind of consolidate and try and become the number two player in this. I think that's how we'll take it.

I think in the case of the Park Avenue acquisition, doing reasonably well, a little slower than what it was last year. I think there's been a pretty sharp change in this market in terms of the market has upgraded from deodorants to EDPs, and that is a segment where there's a clear market leader, but we are now competing for number two and getting explosive growth actually in EDPs.

There does seem to be a market change from deodorants to EDPs. Again, this is one of those markets where I feel like the long-term growth will be there.

Our short-term growth is still respectable, but a little bit lower than what we want it to be, but we will accelerate it with time.

Could you elaborate on the EDP? What constraint is there, if any, in terms of either technology or product

No, there isn't any constraint. I think it's just a market that has rapidly evolved in India.

When we bought this business, we had next to nothing business in EDP, and now it is a pretty substantial amount in our gross sales value, almost ₹100 crore-odd. That business is rapidly exploding.

There are some categories we're operating in like laundry liquids, incense sticks, EDPs, which are all rapidly exploding. You've got to basically position yourself in super-fast-growing categories, and EDP certainly seems like a super-fast-growing category in this segment.

Thanks. That's all from my side.

Thank you.

Thank you. The next question comes from the line of Nihal Mahesh Jham from HSBC.

Please go ahead.

Am I audible? Hello?

Yes. Sir,

Sudhir, the first question was on HI. If you look at last quarter also, there was an impact of weather-related vagaries, and I think that has continued this quarter also with an excessive winter.

Just wanted to understand, at the time of the analyst meet, you said that with the launch of RNF, we are expecting at least the volatility of the index sort of reducing between, say, a 95 to a 105 kind of a range. Are we seeing that kind of a reduction in volatility with, say, the march of the new molecule?

If you could just give a sense if the growth was actually positive this quarter for the HI business?

No, growth was positive. Actually the last three quarters in India have been a cooler 9 months.

The cooler 9 months in quarter one positively benefited HI, but negatively benefited soaps. Quarter two and quarter three have actually had a negative impact on both soaps and HI.

We've actually delivered these results in Q3. We have a infestation index, and now for 6 or 7 months, it's been relatively poor, which is actually quite unusual.

We are expecting, however, that this year Holi is a bit early and an earlier summer onset, and we hope that that'll be positive for our business. I think the RNF won't change the volatility of HI results, because the volatility of HI results depends on the volatility of seasonality.

It will change the mean from a business that was practically not growing. I think it is going to go, and as our incense sticks business becomes bigger and bigger and that business is now quite a profitable business, and we're having good success in market shares and electrics, and also our non-mosquito business is doing well, this business, I think, is in the mid-single-digit range and will kind of I think inch towards high single digit.

There will be a volatility of plus-minus 5% in any quarter. From going from 95, 105, it may go to 100 to 110.

This is how the volatility will be in HI, I think, going forward. I think there's a couple of percent improvement in our revenue rates after RNF.

That I think is quite clear to us.

Sure. The second question was on the incense stick.

One of the worries at least last year was the fact that the margin profile of this subsegment is much lower and it could sort of end up cannibalizing at the overall HI margins as such. Now at least with the way you are targeting, is it that that kind of a lid in terms of consciously growing the incense sticks is sort of out and it's just looking at expanding either incense sticks or LV?

In incense sticks, we have taken a weighted average price increase of 30% since we launched, and we're seeing no slowdown in our volume growth. Now our margins are pretty good actually in incense sticks.

Got that point. My final question was just on the margin bit.

Obviously, the HI performance has been a bit moderate, but if I were to just look at the margin improvement in the India business from last quarter, would most of it be explained by the normalization in soaps, or there were some other aspects you want to highlight?

No, I think there are two, three causes for the margin improvement. Relatively minor one has been normalization in soap, because that actually will start playing out from next quarter or this quarter onwards.

I think the biggest one has really been on cost savings. We've had an unusually high year in terms of cost savings.

I think we've had very significant savings in media costs. Actually, while our ATL looks optically as lower, the number of GRPs that we're spending in the market is actually higher.

I think we made a big decision to change to a very large new media house, and that has got us significant media savings. We've also got significant cost savings on the back of supply chain initiatives like the new factories that we launched.

Also, in both laundry and soaps, we've got some reasonable savings in terms of product changes that we have made, which are kind of giving us more blend flexibility, because one of the things that did happen over the last 18 months is the relative price of kind of vegetable oil to fossil fuel, that increased. Both in soaps and in detergents, you can have reasonable blend flex.

Combination of these three things, supply chain savings, blend flex in soaps and detergents, and media savings, have been the big driver of margins. These are structural savings.

They'll persist.

Just a last quick follow-up, with soaps margin getting better, we can actually exceed the 24% to 26% guidance in Q4 or in FY27?

I doubt it, because we also have, all said and done, with incense sticks and laundry growing the way they're growing, we also have a negative mix that is coming in. I would be surprised if we exceed this 24% to 26% range.

This is also an annual range. In a quarter, may go up and down.

This annual range of 24% to 26% is roughly where we will be is what I think. Because, look, our objective continues to remain something I had said 4 years ago and we've not fully achieved it, which is to get to 10% volume growth.

We feel we're in the 6% to 7% volume growth in India. We had two big objectives, to kind of take India up to first high single digit and then double-digit volumes, and then to structurally improve our Africa margins.

On both these, we've made pretty substantial progress. I feel on India, we can inch up volumes more.

It will happen simply because some of our growth drivers, which are air, laundry, and to a certain extent hair colour as well, their growth rates are not slowing down despite their size becoming bigger. If you actually take this year ex of soaps, our volume growths were very, very high.

I think soap volume growths will come back with GST, etc. That's really our intention is to get volume growths and to kind of keep margins range-bound.

Got that. Thank you so much.

Thank you. The next question comes from the line of Harit Kapoor from Investec.

Please go ahead.

Yeah. Good evening.

My question was on India volume growth only. If you look at this quarter, obviously, this performance has been extremely strong, but you also, as you have mentioned earlier, had the benefit of base.

As the quarters progress over the next, say, two, three quarters, you're still a low base, but it is higher than quarter three. Just wanted to get a sense of what can help sustain this volume growth number, given that base moves up and the impact of the soap benefits have started already to come in?

If you could just shed some light on the moving parts, that'd be very helpful. That's my first question.

See, firstly, the soap volumes in this quarter were a little lower than my expectations. I think it took us October and actually half of November for all the old price stock to get cleared.

We had a good December. It's not like this quarter has been driven by soap volumes.

It's actually been driven by air care, laundry, hair care, and incense sticks, and actually non-mosquitoes in HI is also growing very fast. Premium HI, while we're gaining shares, still growths are muted, though it's still growing in terms of volumes.

I feel like what will benefit GCPL is that some of these growth engines now have got critical mass. If they continue growing, there's a compounding effect of these.

I'm hoping that this compounding effect kind of takes our volume trajectory up by, let's say, 100 bps a year, which is what we're hoping. It is a volatile business thanks to HI.

You're going to look at the annual growth numbers. See, in FY24, our India volume growth was 7%, but it was driven by a high soaps.

In FY26 25, we actually did 5% volume with a poor soap. In FY26, I expect to do somewhere between 6% and 7% with a poor soap.

FY27 soaps will hopefully be a little better. If you look at our non-soap volume growths, because soap was also fluctuating depending on palm oil prices, that has been steadily going up.

The contribution has been going up and the volume growths there have been, I don't think we declare those numbers in public, but if you calculate based on soap numbers, you'll see that those numbers have been in a strong uptick. Soaps will normalize at 101, 102 kind of volumes.

That's how I expect to see the future.

Got it. The second one was on gross margins.

Look, India business has seen an improvement on the gross margin now second consecutive quarter, sequentially the GM has improved. When we kind of compare this quarter three to, say, the last 4 or 5 years of quarter three performance, we are still below our averages.

Is it explained by a still higher cost table, or you think it is explained more by how the mix has shifted in the business from a product category perspective? Because if mix is the factor, then we have to think of the similar kind of trajectory going forward

also. We had one exceptional gross margin year in FY24 in quarter three, where we had very, very high EBITDAs.

If you remove those numbers, those gross margins are where they are. I think there will be pressure, a little bit of pressure on gross margins, which I hope will get alleviated with scale and leverage there.

That may be where we may be. There will be pressure, a little bit on See, our gross margins are high, but we'll have to try and make those up through cost savings.

I'm not overly worried about gross margins numbers changing dramatically.

Got it. The last one was on cost savings itself.

If you look at the other expenses this quarter in India, it's down almost 6%. I think you did mention that this year has been a year of good cost savings, and you're seeing other expense number in India actually come down from double digit to now a negative number.

If you could just highlight exactly what in OpEx piece, because the advertising bit is clearly visible in your advertising spend, the change of the media house, etcetera. As I would assume that some of the blend changes would have reflected in the gross margin, the other expenses, what would that lower number contribute to, and is that a one-off which is it going to be a lower growth going forward for a year?

Yeah. Hi, Harit.

Harit, I think if you had to explain the reduction in other expenses this quarter, I would say 50% of it would be attributable to savings. There have been savings in other cost lines.

Part of it is to do with phasing. In a quarter, there is some phasing which happens quarter-to-quarter on cost.

We have managed to kind of save on to some of the other expenses of course, as part of the total cost-out plan. Some of it is just phasing between quarters.

Sometimes some quarters have higher costs, some have lower.

Got it, Aasif. The way to think of it is that some of this will sustain, some of it, as this is tightening, comes back.

That's right. All right.

Those were my questions. Thanks and all the best.

Thank you. The

next question comes from the line of Karthik Chellappa from Indus Capital Advisors Limited. Please go ahead.

Yeah. Hi.

Karthik here. Hope I'm audible.

My

Yes. Yes, Karthik.

Yeah. My first question is on personal care.

Given that majority of the GST-related adjustments are behind us and it looks like the trajectory is starting to be positive again, assuming the commodity situation is stable, can we expect the revenue growth in personal care to accelerate starting in fourth quarter?

Certainly, the volume growth will accelerate. Even revenue growth should on soaps, because the GST has not been a real price drop.

Yes, I was hoping, frankly, that October, November would be slightly better in soaps. It's taken a little bit longer.

Yes, I would hope that happens. Depends a little bit on the weather and it's been a very cold winter as well.

That's been the other reason why soaps has been a bit soft. Yes, I hope it accelerates a little bit.

Is our pace of market share gains in soaps, is there any change in the pace of that market share gain?

Yes, I think the pace of the market share gains is a little lower than what it was in the past, but we are still gaining market share, and that's important.

What would you attribute that to?

It's too small to have any It's not a material difference. If tomorrow if you're growing 30, 40 bps a year, and a year you grow 10 bps, it's really hard to attribute it.

If now for 2, 3 years in a row, if you grow 10 bps, then we can say is there a change. It's hard to attribute in a 1-year period what that reason is.

Okay. Fine.

My last question is on Indonesia. Given that you expect conditions to normalize in FY27, how early do you think the revenue growth can revert to a positive territory?

See, I think this of this revenue growth is already positive. It's a bit optically negative, because I think we did a re

We changed the arrangement, Karthik, in terms of how we used to kind of operate with some of the GT dealers. Because of the change in arrangement, some of the expenses which were otherwise kind of historically getting booked as costs now kind of is taken off the margin.

As a result of which, the price growth is kind of negatively impacted. That's kind of contributing to a few lines of lower sales growth.

I do expect, see, we've grown 5% volume, which is actually pretty good. We may be in this region, maybe even a little less than this, in this kind of hovering region.

I think the revenue growth will turn positive quite soon, among other things, because there's a currency base also coming and so on. I would say that the Indonesia kind of the worst is probably behind us.

This quarter, again, in Indonesia, optically the results may not be great because of the change in dates of Lebaran, which is Ramadan for them. This underlying 4%, 5% volume seems to be back, and it will follow in price soon.

Sir, the way I can interpret this is, given the fact that your volume growth is quite healthy and has surprised, and we have also expanded margins, that means the peak of competitive intensity is behind us. Is that a fair inference?

I think the peak of competitive intensity is indeed behind us. It continues to be competitive like every other part, but there was a period of 6 months of very high competitive activity on pricing, which does seem to be a little bit behind.

Excellent. That's all from my side.

Wish the team all the very best for FY27.

Thank you.

Thank you. The next question comes from the line of Percy from IIFL.

Please go ahead.

Hi. A couple of questions from my side.

Firstly, you mentioned that on media cost, you have a saving because you went with a big media house. What I recollect from one of your analyst meet is that you actually had made a big effort to sort of completely insource the media function, and you actually gave a sort of 15, 20-minute presentation on that.

What am I missing here?

I think we made a presentation on insourcing the creative function. The media buying, we have actually bolstered our team in-house, and there's a lot of use of technology.

One reason for the reduction in media costs is the agency, another reason is far better internal planning. Our media function is not an in-house function.

We continue to work with GroupM. Our advertising function is an internal function.

Okay. Got it.

Secondly, on soaps, I just wanted to understand without giving any numbers or anything, but is the soap volume growth positive or negative?

It's positive.

It's positive. Okay.

Lastly, on HI, can you give some understanding on your market shares in HI over a 1-year as well as let's say a 3- or a 5-year period? What kind of market share gain in bps you have done in this let's say if you exclude incense sticks, because that was a problem in terms of that market itself growing faster, and until recently you are not participating.

If you want, you can exclude incense sticks altogether and give some kind of flavor on the market share within the rest of the market. Also, again, without giving hard numbers, but among the top three, four players in the HI space, would you be able to call out sort of which are the ones which are doing relatively better, which are the ones who are sort of struggling, just a flavor for our understanding?

Percy, that last question I can't answer on who's doing well and who's not doing well. It's not proper for me to answer that.

As far as we go, one of the things is that this year in HI, it's four segments. It has incense sticks, electrics, aerosols, and coils.

In each of these four segments, we've gained significant share. In each of these four segments, firstly, we have introduced the new molecule.

Each of the segments we have gained share. Overall, still in HI we have not gained share, simply because our share of incense sticks, which is such a fast-growing market, is much lower than the other segments, and there's a mathematics of share gain.

In a few years' time, we'll start gaining share. To answer your question, in the short run, we have gained, if you remove incense stick, we have gained very significant shares in HI.

Even in the long run, we have gained significant shares if you remove incense sticks from the calculation. In other words, in terms of our share as a percentage of organized players, in the medium and long term, it has been increasing, and in the short term, it has increased pretty rapidly.

Would I be right in assuming that excluding incense stick, the market growth itself on a 1-year or even on a 3-year basis is flat to negative?

A little bit more than that, but yeah, very marginally positive excluding incense sticks. Including incense sticks, the market's growing at kind of mid-single digits in value, but actually in terms of volumes, it's a very fast-growing market.

You may have seen there some of you had written to me. There was a Times of India article on the fastest-growing categories in terms of penetration, and hair colour was number one, but the number three category in India was household insecticide.

A couple of you had written to me saying, what's the conundrum? The conundrum is that the category is going

Sorry to interrupt.

Sorry to

interrupt. Sir, we have lost your audio for 3 to 4 seconds in between right now at the end.

Okay. Can you hear me now?

Yes, sir.

Okay. No, so, Percy, I was just saying that the category of HI is actually having very high consumption growth.

It's one of the fastest-growing categories in FMCG in penetration and consumption terms, but very moderate value growth because of the price per night falling thanks to incense sticks.

Understood. Last question, if I might be allowed, in Africa, you have done very well over the last few quarters, and you're continuously growing EBITDA at sort of high teens.

On this higher base, do you think you can keep up this kind of a performance, or should we moderate our expectations for the next year in terms of EBITDA growth to a more low double-digit kind of a number?

I think there's still Aasif is here, but for him because he wears two hats, and in the hat of GAAM, I still think that there is now the kind of sharp margin increases we saw in Africa may not happen, but I do think that there is still scope for us to have some kind of cadence of margin improvement in Africa going forward, and I hope that bottom line grows faster than top line in Africa for the next few years.

Top-line growth double digit is still the target in Africa, right?

I don't know about that, Percy. It may not.

Depends a lot on currency and things like that, but we certainly will aim for that. Africa is a little bit volatile, and some of those things is hard to predict.

I would be quite happy if we can do high-single-digit volumes in Africa, and whatever happens to currency happens.

Okay. Got it.

Thank you. That's all from me.

All the best.

Thank you. The next question comes from the line of Aditya Vikram from DB Securities.

Please go ahead.

Hi, Sudhir. Thank you very much for taking my question.

Good set of performance. Two things, right?

A lot of conversation with previous analysts, right? It seems like the margin trajectory, do you see it stabilizing here, or do you see it up and down based on how things go?

That's my first question.

I think, look, see, one of the differences, and the way we kind of operate the business is, that our business margins are quite dependent on oil price fluctuations. If oil prices don't fluctuate, our margins won't fluctuate.

In the past, when oil prices went up, we would sharply cut advertising. That we don't do these days.

We've got some savings in advertising, which are structural. I would say that if there's a very sharp increase in oil prices again, and when I say very sharp, it has to be greater than 15-odd percent, then we will take another quarter or two to recover the margins.

We won't react in the short term by cutting media just to cover up some margins optically. This has happened in the last 5 years twice.

I don't know when it'll happen again. Frankly, when oil prices go down, we tend to pass on so when we pass on the benefits to consumers quite fast, whereas when they go up, we pass it down a little bit more slowly.

That is the only condition in which we may have a margin hit. Otherwise, I expect it to be in this kind of range, maybe a little lower in summer months, a little higher in winter months.

Okay. The second question I have is around the new section on the Home Care, specifically around toilet cleaners and everything, right, the Spic brand, if I'm not wrong.

How is that doing, and is there some sort of a strategy where you're going to move out from Tamil Nadu and cover most of the southern sectors? I remember presentation only based What sort of one are we there?

Sorry to interrupt. Aditya sir, your line was breaking at the end of your question.

If you could please

I've understood the question.

All right.

I can answer it. Sure.

Thank you, Aditya.

I think we launched Spic, a toilet cleaner, in Tamil Nadu 2 months ago. Usually, the results are quite positive.

We usually don't decide anything before 6 to 8 months. We will wait for 6 months before deciding what to do next.

The initial traction, do you see it going as per your

I think these things are best decided 6 months, because sometimes you can have good performance in the first month or two, then it slows down or vice versa. A good call on this is 6 months.

I would say that we are quite encouraged with Spic. It's a good product and we're quite happy with consumer response.

Before we take a call on national rollout or even south rollout, I think we must wait for 6 months to pass.

Okay. Those were my only two questions.

Again, congrats on a very good set of performance. Best of best wishes to you and your team.

Thank you.

Thank you. The next question comes from the line of Akshen from Fidelity.

Please go ahead.

Hi, sir. Congratulations on a good set of numbers here.

Just one question around how should we be thinking about India volume growth going ahead? Just overall for FY27 and also in near term, because you have quarter now next couple of quarters where the bases are sort of weak, right?

Soaps has got a negative base, HI has got a high base. Just wanted to get gauge your confidence and ability to sustain sort of this broad trajectory of high single digit to low double digit that you've been able to deliver this quarter.

That's question one. I'll wait for you to answer and then ask my second one.

Thanks.

I don't think we'll grow at 9% volume and all going forward, but this 6% to 7% volume, gradually inching up is what I think the India business, and it'll inch up. It'll inch up because I told you one of the things, and maybe in the May analyst meet we'll talk a lot about, is our portfolio has changed quite dramatically in the last 3, 4 years.

There's a fast-growing part of our portfolio continues to grow fast even though it's becoming bigger. There is a compounding effect that is happening for our portfolio, which we'll talk about.

I do expect kind of sequential gains in volume growth, but right now I think we're at a kind of rough level of six. I hope we can take it to 7, 8, and so on over the next maybe 18 to 24 months.

That's what I hope we do, with volatility. Yeah.

Sorry,

by six, I mean reported volume growth is higher this quarter. I'm not sort of Six is your stripping of the adjustments of the GST stock-off that you had last year.

Is that That's right.

Yeah. We had a relatively, last quarter we grew 4% volume, which was also okay.

This quarter we've grown 9%, you average out the two, it's 6.5%. On a base last year, this Q3 was a low volume, but Q2 was high volume.

All in all, we're in the 6% to 7% range, give or take, which we've got to inch up. I think, actually, in India, the good thing is for the last 3 years we've consistently been on this range.

It's not like, when you take the annual number of Indian volumes, it's consist Not that 6% to 7% is sort of outstanding or anything, but given the context of the market in India, it's quite respectable.

Yeah. That was going to be my second question, that a lot of volume goodness that we've seen has been self-help for you.

What's been lacking is a broader pick up in consumption. Just wanted to get your perspective on that front, if you've seen broader consumption trends starting to improve.

Thanks.

I can't say that still with full confidence. I think we'll have to see the results of the various peers this quarter, and this quarter, of course, has, everyone's results will be better than last quarter thanks to GST.

We'll have to wait and watch. In our particular case, the category that's been affected has been soaps, which, as I told you, was actually slightly disappointing this quarter, but it picked up quite well towards the end of the quarter.

Both a very cold winter and kind of GST transitions meant that we really got bang for the buck only by December. I would still kind of wait.

Look, honestly, we want to shape ourselves that our volume growth trajectory is pretty independent of so we still want to kind of move towards this aspirational double digit, and we constantly think about it regardless of what the market is growing at.

Right. Thank you.

Thank you, team.

Thank you. A reminder to all the participants, if you wish to register for a question, you may press star and then one now.

Our next question comes from the line of Anurag Dayal from PhillipCapital. Please go ahead.

Yeah. Hi, sir.

Sir, basically, my first question is on Africa business. We have seen the constant currency terms growth moving to single digits in this quarter after three quarters of very strong numbers.

Now going forward, two questions here. One is, could you help us understand category-wise, we had got lot of different international brands in global markets?

We did it with air care, I understand, which has done well. Which all segments we are eyeing for better growth in Africa, and which segments we are still seeing some disappointment?

For example, if we have input how much insecticide there, how that has performed, that's one question. Secondly is how we see this growth trajectory?

Will it be still around high single digit, which we have to forecast over the next two, three quarters?

Yeah. Hi, Anurag.

Anurag, firstly, I think in this quarter also we had a strong underlying volume growth. Currencies, as Sudhir said, keep fluctuating.

You have some currency appreciation, depreciation, it keeps moving up and down. There is also some play of pricing.

When you get kind of better deals in terms of input materials, etcetera, you do kind of pass on some of the pricing benefits to the consumers. Structurally, underlying volume growths have been strong in this quarter, and as Sudhir said, we will kind of work through to ensure we deliver high-single-digit underlying volume growth going forward, yeah.

There is a plus-minus which will keep happening on price, local currency, and in INR terms, yeah. In terms of margins, we've already kind of spoken about the guidance.

When it comes to new categories, there are multiple categories where we have a global right to win, and we will sequentially kind of build our presence across the entire continent in each category. You will see action from us going forward.

Okay. Is can't call out any segment where we could see a better we are building in something which have tried hasn't scaled that well till now, but we hope it does well?

Yeah. No, I think we've spoken about air category, which we relaunch, yeah, in this year.

There is still a lot of runway in terms of taking that to a particular size and scale. We do have a presence in terms of wet hair category.

There is still a huge runway to kind of grow there. These two are definitely levers which we have.

As we kind of get into new categories, we are definitely working on and piloting a few more. As we launch them, we will definitely kind of share.

There are reasonable plans to kind of get into a few new categories over the next 2 to 3 years.

Sure. One last question is pertaining to this litigation charge, which cost if you have paid, especially on Strength of Nature, of around ₹23 crore-odd.

Is it a one-time, or will it be recurring? Where we are in this class action suit?

Could just give some

Some of these costs are being incurred in terms of legal expenses which are being incurred. We will have to see how this progresses, but yeah, it's likely to kind of continue for a few quarters.

Okay. Thanks.

That's all my questions.

Thank you. Our next question comes from the line of Ajay Thakur from Anand Rathi Securities.

Please go ahead.

Hello. Thanks for taking my question.

I had two questions. One was more on the personal wash segment.

While you indicated that there has been a small positive volume growth in the personal wash segment this quarter, wanted to understand more on the aspect in terms of what kind of a portfolio is driving that? Is it more of LUPs which has been driving the growth, or is it across the portfolio that we are seeing that kind of a growth coming through?

Actually, the unit growth is pretty robust in the quarter, because we're still lapping despite GST and grammage increases on the small packs, our small-pack grammage is still significantly lower than what it was in Q3 last year. Actually, our unit growths are significantly higher than our volume growths, which is why all this will anniverse rise and we'll go back to reasonable volume growths.

Compared to previous quarters, the turnaround pretty sharp in most parts of the portfolio. I don't think there's any specific portfolio story on soaps.

I think the GST price drops have helped, and it will only help further in the subsequent quarters.

Understood. Quite helpful.

The second question was more on Spic, which you have just kind of introduced more in Tamil Nadu market. Wanted to get a sense in terms of what is our proposition over there?

What makes us stand out in that segment? Will it be more of the pricing disruption that we're looking at, or is it going to be more than that?

Also if you can share some insights into the toilet cleaner markets, how is it standing? You had indicated that it's a ₹3,000 crore kind of a market, but in terms of the players, in terms of the dynamics, how it is shaping up in that segment?

Yeah. Thanks.

One of the things in our launches is we don't just launch products with a price disruption. Otherwise, we would have launched a lot more home care products than we've launched.

We are very cautious on launching products which are perceivably better than what consumers are using, and Fab, contrary to what lot of people think, is not just a price disruption, it's a structurally a different product. Here, too, in Spic, it's a different product.

Our promise here is not just cleans, but also prevents stains from forming. You have to use the product and you'll see that it's a differentiated product.

We are selling at a price index of about 70 to the market leader. That's the kind of cherry on the cake.

It's early days to say how good this is, how it's doing. We are reasonably encouraged with it, but we are pretty patient on these things.

We wait for 6 months, study it carefully, then ask the question, is it worth doing nationally, which is how we'll do it.

Understood. Quite helpful.

Thanks, Sudhir. Thanks.

Thank you. The next question comes from the line of Pankaj Murarka from Renaissance Investment Managers.

Please go ahead.

Yeah. Hi.

Sudhir, just to delve a little more, when you talk about sustained 10% volume growth, obviously, a meaningful part of the portfolio is soaps, which if we take the long-term averages, we know where the growth is, then effectively we would need the rest of the portfolio to be growing at low to mid-teens on a sustained basis. From a slightly more medium-term perspective, if you can articulate the strategy there in terms of while I took your point that the existing categories even on a large scale are growing at a pretty high rate, but some point of time these categories will get into some sort of a base effect.

How should we think about the whole construct of the business from a medium-term perspective as you're driving it? I think your maths is correct.

The rest of the categories have to grow at teens, which they're growing, by the way, at. As they become bigger, the impact of them will become more.

That's what I was talking about the compounding effect. The three big categories that have been growing very fast for us have been air care, laundry liquid, and incense stick.

These are the three that have really, and they're now becoming all of them are material size and rapid growth. All of them have very large TAMs.

There's a fourth one that seems to be emerging, by the way. It's still not large enough, which is perfumes, EDP.

EDP is not of the same size and scale as these three. These are four what I would call very, very fast-growing segments.

All these four has very large TAMs. Our market share in India is high, but our per capita consumption in India is a fraction of what it is in Southeast Asia, it's got a long runway of growth.

Laundry liquids has got a very long runway of growth, because it's nothing. It's still only 6% or 7% of the total laundry market, and volumes in that category are growing 30%.

We are gaining share on top of that. That market, we continue to expect actually multidecade growth.

I think it'll grow like this for at least 10 to 15 years. Incense sticks, we are a very small part still.

We're only 10 share of the market, we've got a long runway of growth on incense sticks. EDP, perfumes and deodorants become a very large category.

Again, we are a relatively small player in a small market. I would say all these four categories that are rapid-growth categories has very high TAMs, which should have hyper growth.

There are two other categories which are also growing quite fast, which is hair colour, driven by penetration, and also non-mosquito household insecticide, but both these should have kind of double-digit volume growth. You have four categories, give or take, should cumulatively grow at 30-odd percent, and two categories kind of growing at 10% to compensate for soaps, and even premium Yeah, so that's really the maths of it.

Yeah.

This is very interesting. Should we also then presume that you'll keep adding products or getting into new categories, let's say, every 2 to 3 years to sustain this?

Look, we've had a strong success on innovations in the last few years. You look at the drivers of growth, it's actually been one of the things that has really kept us growing at 6% to 7% despite, frankly, lot of HPC markets growing at 2% to 3% has been the delta that we've got on innovations.

We're a bit slow about it and methodical. We've just launched Spic.

It'll take some time. As and when we find opportunities, we will innovate within kind of this HPC, in particular home care kind of area.

I think we've got to have products that are materially better than what is available to consumers, because otherwise we don't see a point in entering a category with me-too products. That does limit the number of innovations we can do, but we'll certainly continue to do that as we've been doing.

Do you think within the next 3 years, we'll get to aggregate 10% growth as you're targeting for the company from where we are at 6% to 7%?

I think so. Certainly, that's what we're working towards systematically.

Because you see the reason I'm saying this is a little independent of Indian growth, GDP growth and general growth and consumption, etcetera, is four or five categories I'm talking about has very, very large TAMs.

At some point of time, you think we will also benefit given some of these categories are higher discretionary in nature, when you talk about EDP and some of the even air for that matter, and this thing, it should benefit at some point of time in terms of much non-linear growth as the economy scales? Would you put it that way?

It's already non-linear right now, but I don't know if the growth rates will further accelerate. I hope that even with size and scale, these growth persist.

That's what the bet is based on. Why am I sort of hoping that we can get to first 7, 8 and then 9, 10 volume, is that I don't see why these categories should slow down materially with size.

They're quite very, very far away from hitting a ceiling.

This is very interesting. Thank you.

Thanks a lot.

Thank you. The next question comes from the line of Abhijeet Kundu from Antique Stock Broking.

Please go ahead.

Yeah. Hi.

Thanks for the opportunity. My first question was sorry for being repetitive, but in soaps, what is the kind of value growth that you could see over the next 2 years or could it be mid 5% to 6% just on that?

Or is there opportunity to see improvement? Or is it that we could get better clarity in from Q4?

First question is that. Second question is that in personal wash per se, there is also a hand wash, face wash, and a body wash market, which is very small, but that has been growing at a decent rate.

You have also launched your products there. How do you look at this opportunity?

Would you put enough of effort in scaling up in hand wash, face wash, and body wash? Yeah.

Abhijeet,

it's a good question. I expect soap value to grow at between 4% and 6% in the long-term basis, low-single-digit volume growth and low-single-digit pricing as well.

That's what I expect in soaps. I expect personal wash to grow faster, first just a little faster, but then much faster because of the compounding effect.

If you see three categories that soaps upgrades into, as you correctly said, are body wash, hand wash, and face wash. In all these three categories, we've made differentiated plays.

In hand wash, we've actually got a very differentiated play which is gaining share, which is Magic hand wash. In body wash, we've got a very differentiated share on Cinthol body wash, which is doing very well for us in modern trade, quick commerce, and channels of the future, and we've just entered face wash with Muuchstac.

All these put together today maybe less than 10% contribution to this business. If they continue to grow at 30% to 40%, they will start giving 2% to 3%, 4% to 5% over a soap.

In this period of 3 to 4 years, they may not materially make a difference. If soap grows at 4%, personal wash may grow at 6% to 7%.

I do see in 3, 4 years as these become bigger and as we kind of also we need a little bit more to be done to consolidate market share. We must get to reasonable market shares in each of these segments.

I do see a compounding effect of these in the future as well.

Okay. Thanks.

Thanks for answering. That's it from my side.

Thank you.

Thank you, everyone, for an exciting discussion. We hope we have been able to answer all questions.

In case of any further questions, please reach out to us on our investor relations contact details. Thank you, and good evening.

Thank you to the members of the management. On behalf of Godrej Consumer Products Limited, that concludes this conference call.

Thank you for joining us, and you may now disconnect your lines.