GCPL ad spends shoot 47.08% to Rs 1,011 crore in FY24

Delhi: Homegrown FMCG major Godrej Consumer Products increased its ad spends by 47.08% to Rs 1,011 crore in FY24 from Rs 687.34 crore it spent in the previous fiscal year.

In the March quarter, the company increased its advertising budget by 32% (YoY) to Rs 231.56 crore from Rs 175.31 crore it spent in Q4 of FY23. However, on a QoQ basis, GCPL’s adex decreased by just 8.6% It spent Rs 253.35 crore in the December quarter of FY24.

The company reported a consolidated loss of Rs 1,893.21 crore in the fourth quarter that ended March 31, 2024, impacted by exceptional items related to the impairment of brand and goodwill, and loss on sale of the business in Africa.

The company had posted a consolidated profit after tax of Rs 452.14 crore in the same quarter of the previous fiscal, Godrej Consumer Products Ltd (GCPL) said in a regulatory filing.

Consolidated total revenue from operations during the quarter under review stood at Rs 3,385.61 crore as against Rs 3,200.16 crore in the year-ago period.

Total expenses in the fourth quarter were higher at Rs 2,758.27 crore compared to Rs 2,680.39 crore in the corresponding period a year ago, the company said.

In the fourth quarter, GCPL incurred exceptional items of Rs 2,375.65 crore, the filing said.

For the fiscal ended March 31, 2024, GCPL said its consolidated loss after tax was Rs 560.55 crore. It had posted a consolidated profit after tax of Rs 1,702.46 crore in FY23.

Consolidated total revenue from operations in FY24 was at Rs 14,096.11 crore as against Rs 13,315.97 crore in the previous fiscal.

"During the quarter ended March 31, 2024, the group refreshed its long-term strategy for Africa, including 'Strength of Nature', enhancing the focus on 'profitable' growth. The strategy refresh resulted in various reorganisation actions during the quarter," the company said.

The future projections were also revised based on the revised strategy and changed external market conditions, it added.

"For the year ended March 31, 2024, exceptional items in the consolidated financial results include impairment loss of Rs 1,390.8 crore towards 'Brand and Goodwill' for Africa (including Strength Of Nature) and Rs 927.2 crore relating to loss on sale of subsidiaries and business in East Africa pursuant to changes in business model and long term strategy for Africa (including Strength Of Nature)...," the company said.

Further, the exceptional items also included Rs 71 crore on account of other group restructuring costs, including employees' severance pay and inventory-related costs etc necessitated by the restructuring.

The exceptional items also included stamp duty payment and other costs in relation to the acquisition of Raymond Consumer Care Business of Rs 87.8 crore, it added.

For the year ended March 31, 2023, exceptional items also include impairment loss of Rs 6 crore towards brands, restructuring costs of Rs 29.3 crore and Rs 18.8 crore on account of litigation settlement under VAT amnesty scheme in the consolidated financial results, the company said.

GCPL Managing Director and CEO, Sudhir Sitapati said the company delivered a strong performance for all four quarters in FY 2024, despite challenging conditions across markets.

"Our consolidated organic volumes for Q4FY24 grew by 9%, led by the India business growing volumes at 7% and Indonesia growing volumes at 12%. This led to strong full-year organic volume growth delivery at 7% for our consolidated business, 6% for India and 11% for Indonesia," he added.

Sitapati said the company continues to improve the strength of its balance sheet.

"We have completed the reorganisation of our East-Africa business. We are happy to report that there will be a positive impact on PAT of Rs 50 crore per annum despite the negative impact on revenue of Rs 470 crore per annum," he added.

GCPL remains focused on driving volume-led growth along with healthy investments in brands and improvement in profitability, Sitapati said, adding, "We are on track in our journey to reduce wasted cost and are deploying this to drive profitable and sustainable volume growth across our portfolio through category development."