Godrej Consumer Products said it has seen a reasonable recovery and pick up in demand in the immediate transition period in July, a trend that will get stronger next quarter onwards. However, wholesale channel and Canteen Stores Department continue to weigh down overall sales numbers for most companies including Godrej. “We believe the recovery could take about a couple of months,” Vivek Gambhir, MD at GCPL, told ET after declaring quarterly earnings. The maker of Good Knight and Cinthol posted revenue growth of 6% to Rs 1,186 crore in the domestic market while net profit fell 2% to Rs 150 crore. Edited excerpts
Despite transition issue due to GST, have you seen recovery in demand compared to either sequential or corresponding quarter?
Consumer demand has seen a reasonable recovery and has picked up in the immediate transition period in July. Rural markets have also performed well as the industry has passed on the GST benefits to consumers. We expect the situation to normalise during the course of the second quarter and witness stronger growth in the second half of the year. This will be accomplished as the channel adapts to the new tax system, a strong monsoon and benefits of lower prices that get passed on to consumers.
Has GST led issues in terms of de-stocking by trade resolved completely now?
We believe the recovery could take about a couple of months as the wholesale channel adjusts to the changes in the tax reform. We are witnessing a faster transition in the Western and Southern parts of the country while the Eastern and Northern markets are taking a bit longer. The retail channel has reverted to its earlier stocking levels and we continue to work with our organised trade partners to ensure that the consumer demand is met and replenished at all times.