When Nisaba Godrej stepped in as the new managing director of Godrej Consumer Products Ltd (GCPL) in July, grey clouds hung heavy over the business.
One of India’s largest fast-moving consumer goods (FMCG) players and the flagship company of the 123-year-old Godrej Group, GCPL’s fortunes had been on the wane for years. This, even as its portfolio of brands has exploded.
In India, the company sells everything from popular soap brand Cinthol to mosquito repellents like Good Knight. It boasts multiple hair care brands, is an investor in a chain of salons and hairdressing academies under the BBlunt brand. It has a brand for air fresheners—Aer—just as it has a brand for insecticides—Hit.
The GCPL sprawl isn’t limited to India. It touches practically every region on the planet with a surprising array of offerings. It’s a market leader for hair extensions in Africa through the brand Darling, sells baby products under its Indonesian brand Mitu, hand sanitisers under its US brand Purest Hygiene, and beauty products under its Roby and Pamela Grant brands in Latin America. And these are just drops in GCPL’s product ocean.
For all of this, though, the company’s revenue and profit growth has slowed dramatically over the past half-decade. From a compound annual growth rate of 32.3% and 21.7%, respectively, between 2010 and 2015, to just 3.7% and 9.8% in the five years leading to 2020.
Covid-induced lockdowns in India and GCPL’s foreign markets haven’t helped things. They contributed to the company’s revenue and net profit (adjusted for deferred tax deductions) declining in the year ended March 2020. A year-on-year drop of 4% saw its revenue slip to Rs 9,910 crore ($1.3 billion), while a 3% drop in profits saw its bottom line slide to Rs 1,450 crore ($194 million).
Now, after 11 years and three professional managing directors, GCPL is once again being steered by a member of the family that owns the company. Taking the reins in the middle of a pandemic, though, is not about staring at the dark clouds but focusing on silver linings. Nisaba Godrej wants to do just that.
The wind in her sails is the outsized role health and hygiene products play in GCPL’s business. They account for 55% of its revenues. Another 24% comes from what it calls value-for-money products, including a Rs 15 ($0.2) hand wash and a Rs 10 ($0.13) paper-based mosquito repellent. With the pandemic shrinking disposable income and turning hygiene into a literal matter of life and death, these segments have catapulted to the forefront of consumer interest.
“This is the year for these products and we know how to do these health products,” Godrej said on an investor call in May, shortly before she took charge.