Godrej Consumer Shares Fall ~2% After Releasing Q2 FY26 Business Update

On October 8, 2025, Godrej Consumer Products shares fell ~2%, reaching a day low of ₹1,130.30 at 09:55 AM, after opening at ₹1,132.10 on BSE. The drop in Godrej Consumer shares follows the release of Q2FY26 business update. The company said in the exchange filing that it anticipates consolidated revenue growth in the mid-single digits for Q2FY26.

The company, known for its household brands such as Godrej No.1, Cinthol, Godrej Expert, and Ezee, highlighted a notable impact from recent GST reforms. As a result of these changes, around one-third of GCPL’s product portfolio, spanning toilet soaps, talcum powders, shampoos, and shaving creams has seen a reduction in GST rates from 18% to 5%.

This tax benefit was passed on to consumers starting September 22, 2025, a move the company believes will drive volume-led growth and contribute to long-term value creation.

Domestic Business Outlook

In the Indian market, GCPL's standalone business is expected to deliver mid-single-digit value growth, with underlying volume growth (UVG) in the low-single digits. The home care segment continues to perform strongly, registering high-single-digit value growth, while the personal care category is projected to see a low-single-digit decline, largely driven by weaker performance in soaps.

International Performance: Mixed Results Across Regions

GCPL's global footprint has delivered varied outcomes this quarter. In Indonesia, intense pricing pressure has led to a modest decline in value, although UVG remains slightly positive. In contrast, the GAUM cluster (comprising Africa, the USA, and the Middle East) continues to show strong momentum, with both value and volume growth in double digits, marking the 3rd consecutive quarter of such robust performance.

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Short-Term Challenges Amid GST Reforms

While the recent GST rate cut is expected to boost demand in the long run, GCPL warned of short-term headwinds. The transition may impact EBITDA margins temporarily, as trade partners work through existing inventory labeled with the older tax rates, causing disruptions in the supply chain. Despite these transitional challenges, the company remains optimistic about improved performance in the second half of the fiscal year.

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