Digital
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Godrej Consumer stands firm on ad spending, bullish on in-housing capabilities; 'Big believers' says MD Sudhir Sitapati
Godrej Consumer Products Ltd has also experienced exponential growth from the quick commerce channel over the past two years.
Godrej Consumer Products Ltd. (GCPL), one of the leading makers of household and personal care goods, said the rapid rise of quick commerce platforms is proving to be a significant advantage for fast-moving consumer goods (FMCG) companies, particularly for mid-sized product packs that offer higher margins.
Sudhir Sitapati, the company’s Managing Director and Chief Executive, said GCPL has experienced exponential growth from the quick commerce channel over the past two years. While he declined to quantify the platform’s contribution to overall revenue, Sitapati noted that the model’s limited-inventory structure favors large, established brands in the FMCG sector.
The remarks came as GCPL reported a consolidated net profit of Rs411.9 crore for the quarter ended March 2025, marking a strong recovery. The turnaround was supported by improved performance across key segments and resilience in advertising investment despite rising input costs.
Palm oil prices, an essential raw material for GCPL’s soap brands like Cinthol and Godrej No. 1, rose more than 50 percent last year. Nevertheless, the company maintained steady advertising expenditure, absorbing the additional cost rather than pulling back on brand investments.
As a company, Sitapati said, they are "big believers in advertising”, noting that GCPL’s advertising and publicity expenses rose modestly to Rs310.07 crore in the quarter, up from Rs306.29 crore a year earlier.
The company also hosted a panel discussion during its investor meet, featuring the heads of its three core internal capabilities—media, creative, and design. The conversation highlighted the strategic advantages and tangible gains achieved through the continued in-housing of these critical functions.
Despite the strain on profitability, GCPL views its advertising investments as a long-term play, with Sitapati stressing that absorbing the short-term pressures was the prudent choice. GCPL has pivoted away from traditional media silos, now focusing solely on "cost per reach," a metric that dictates every media investment decision. This shift has led the company to adopt a neutral stance on media channels, including digital, linear TV, and connected TV.
Looking ahead, GCPL has significantly ramped up its advertising spend over the past three years. Sitapati indicated that while the company may pause and assess the current pace of investment, it remains committed to maintaining high levels of marketing expenditure for the time being.
For the full fiscal year 2025, GCPL reported a consolidated profit of Rs1,852.3 crore on revenue of Rs14,364 crore. Advertising and publicity expenses totaled Rs1,369.2 crore for the year.
Still, challenges remain. The company acknowledged ongoing pressure on urban demand, and earnings before interest, taxes, depreciation and amortization (EBITDA) for the fourth quarter fell 9 percent to Rs2,160 crore. The rise in palm oil prices was cited as a key factor impacting margins.
Segment-wise, GCPL’s home care division grew by 14 percent, buoyed by strong performance in its insecticide business. The company’s Goodknight Agarbatti product has emerged as a market leader, benefiting from seasonal demand and gains in market share.
The personal care segment, which includes hair color and handwash products, saw 4 percent growth in the quarter.
International operations also showed promise. Revenue in Africa, the United States, and the Middle East rose by 23 percent, with EBITDA in those regions climbing 37 percent year-on-year to Rs116 crore. In Indonesia, growth was more modest, with a 1 percent increase in sales in constant currency terms.
GCPL said consolidated organic volumes rose 6 percent in the fourth quarter, led by 4 percent growth in India and 5 percent in Indonesia. For the full year, volume growth stood at 4 percent, supported by solid performance across both domestic and international markets.
SPOTLIGHT
At the Storyboard18 DNPA Conclave 2025, Union Minister Ashwini Vaishnaw spotlighted the critical role of traditional media in an evolving digital landscape. He emphasized that such gatherings can aid the govt in formulating more effective policies for a balanced and sustainable media ecosystem.
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