Godrej Consumer Products' Q2 revenue up 19%

Godrej Consumer Products Limited (GCPL), the FMCG major behind brands such as Goodknight, Cinthol, Godrej Fab and Aer, kept advertising expenditure largely flat in the September quarter despite strong business growth. Digital gained prominence as rising input costs pressured spending.

According to its Q2 FY27 financials, consolidated advertising and publicity expenditure rose 2.2% year-on-year to ₹327.05 crore from ₹319.95 crore, while revenue grew 19% to ₹4,413 crore, supported by 8% underlying volume growth. Advertising expenditure stood at approximately 7.4% of sales.

The divergence reflects GCPL’s focus on cost control amid inflation. Crude-linked derivatives, palm oils and other commodities have become significantly more expensive, particularly affecting soaps and liquid detergents. The company has responded with price hikes, grammage reductions in soaps and a broader cost-saving programme, alongside optimisation of media and trade investments.

“The input cost environment remained significantly challenging during the quarter. Inflation intensified across crude-linked derivatives, palm oils and other commodity inputs,” said Aasif Malbari, Managing Director and CEO of GCPL.

The pressure is more visible in the India standalone business. Sales grew 13% to ₹2,631 crore, supported by 7% underlying volume growth, while advertising and publicity expenditure declined 17.2% year-on-year to ₹184.74 crore. However, the company has reclassified certain advertising and promotion expenses as deductions from revenue, making like-for-like comparisons difficult.

Malbari said GCPL had combined pricing actions and cost savings with media and trade investment optimisation while keeping its share of voice range-bound.

The approach contrasts with peers. Colgate-Palmolive India increased advertising expenditure nearly 40% to ₹314.82 crore, while Nestlé India raised advertising and marketing spends by 46%, according to e4m’s early read of FY27 results.

GCPL, meanwhile, reported growth across key categories. Home Care grew 19%, with gains in household insecticides despite a weak monsoon. Air Fresheners sustained double-digit growth, while Personal Care grew 8%, supported by Cinthol Bodywash.

Digital is central to the company’s efficiency strategy. “We have also increased the salience of our digital investments which have a much higher ROI,” Malbari said.

The restrained spending comes alongside a growing product pipeline. GCPL has introduced Godrej Rizz, its liquid dishwash offering, in select West and South Indian markets. It has also launched Godrej Zap, an online stain remover, and is preparing Hair Lab for the premium hair colour segment. Godrej Spic has expanded pan-India, while the “GK 6-min” campaign supports its electrics portfolio.

For agencies, the approach signals greater emphasis on digital-first formats, regional adaptation and creative work that can deliver recall without substantial media spending.

“With continued cost saving and further pricing, we will ensure that we invest further behind our growth drivers,” Malbari said.

GCPL has maintained its FY27 guidance, targeting high-single-digit underlying volume growth in standalone operations and double-digit consolidated revenue and EBITDA growth. The focus remains on protecting profitability while directing investments towards growth drivers.