Godrej Consumer Inks ₹700 Crore Investment to Boost Production Capacity.

Godrej Consumer Products Ltd (GCPL) has signaled strong confidence in the resurgence of domestic consumer demand within the next 12 to 18 months, announcing a significant capital expenditure (capex) of ₹700 crore over the next two years. This investment will be channeled towards bolstering its manufacturing capabilities in India and establishing a new facility in the international market.

Sudhir Sitapati, Managing Director and CEO of GCPL, shared the company's optimistic outlook during a recent media roundtable. He elaborated that the capex would be strategically deployed to enhance the operational capacity of their recently established factories in South and North India by adding new production lines. Furthermore, the company plans to set up a new manufacturing unit in Indonesia within the next two years.

Mr. Sitapati outlined several factors underpinning GCPL's bullish stance on demand. He pointed to the anticipated reversal of the El Nino effect, which has already contributed to a decline in food inflation between January and March. Given the direct impact of food prices on Fast-Moving Consumer Goods (FMCG) consumption, this easing of inflation is expected to spur demand.

Additionally, he highlighted the positive influence of government initiatives such as income tax reductions, welfare schemes, and upcoming pay commission payouts, all of which are projected to fuel a revival in the FMCG sector.

Looking ahead, the Mumbai-based FMCG giant anticipates robust financial performance. The company projects a double-digit growth in Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA), supported by the softening of palm oil prices. GCPL also expects a mid-to-high single-digit standalone volume growth and a high single-digit consolidated revenue growth. This strategic investment in expanding production capacity underscores Godrej Consumer's commitment to capitalizing on the anticipated upswing in both domestic and international markets.