● FMCG company's long-term prospects are positive

The management anticipates mid-single-digit revenue growth with Ebitda margins below the normal range of 24-27%

GODREJ CONSUMER PRODUCTS has highlighted a flat domestic UVG (underlying volume growth) for Q3FY25E in its mid-quarter update, marking a significant slowdown from the 7-8% growth seen in 1HFY25. The deceleration is attributed to a weak home insecticides (HI) season and inflationary pressures in soaps. The company now expects India business EBITDA margins to fall below 24%, compared to the earlier guidance of 24-25%, indicating margin pressures.

In response, we have revised down FY2025-27E EPS estimates by 4% and adjusted the fair value (FV) to ₹1,365, valuing Godrej Consumers at 50x Dec 2026E PE. While near-term challenges persist, we remain positive on the companies' long-term prospects and will monitor the progress of RNF LV (ready-to-use natural formats in liquid vaporisers) and market share trends in soaps through 1HCY25.