On Friday, October 30, Godrej Consumer Products (GCPL) shares fell more than 7%, reaching an intraday and 52‑week low of ₹777.20 per share, down from ₹837 at the previous close. The decline was driven by investor concern over margin contraction caused by elevated raw material costs in the July‑September quarter of FY27. Despite a year‑on‑year rise in consolidated net profits and healthy revenue gains in Q2 earnings, the raw material cost overhang added downward pressure on the company’s operating and EBITDA margins.

The company’s management maintained its FY27 guidance, anticipating double‑digit revenue and EBITDA growth at the consolidated level. Analysts from HSBC noted that overall consolidated volumes in the Indian market remained stable for GCPL in the 7‑8% range, while the Africa business was the top‑performing segment. HSBC analysts warned that rising inflation remains a headwind, especially for India margins, and that the raw material cost overhang continues to cloud the outlook even though management has retained its guidance.

CLSA experts highlighted that raw material inflation led to a 500 basis‑point standalone gross margin contraction year‑on‑year, despite a 6% pricing growth in the period. They added that consolidated EBITDA was in line with CLSA estimates but 2% below consensus. The experts also noted that GCPL’s management has highlighted an aggressive pricing increase in the soaps and detergents product category as both businesses retain normal margins.

In Q2 FY27, GCPL posted a 14% surge in consolidated net profits attributable to owners, rising to ₹523 crore from ₹459 crore in the corresponding quarter of the previous fiscal year. Total revenue from core operations advanced 19% to ₹4,413 crore, compared with ₹3,708 crore in the same quarter of the previous year. Operating profit or EBITDA (excluding other income) rose nearly 12% to ₹820 crore, but margins were pressured by raw material costs.

Raw materials cost increased to ₹1,654 crore in Q2 FY27, from ₹1,524 crore in Q2 FY26, marking an 8.5% yearly increase. EBITDA margins contracted 119 basis points to 18.58%, compared to 19.77% a year earlier, while operating margins declined 120 basis points to 18.7% from 19.9% a year ago. The company reiterated its FY27 guidance, stating that revenue is running ahead of plan through the first half and that it remains on track to deliver double‑digit growth at the consolidated level.

GCPL declared a ₹5 per share interim dividend for all eligible shareholders up to 24 hours before the official record date of Wednesday, November 4, 2026. The dividend will be paid to all eligible shareholders on or before Friday, November 27. The company’s statement emphasised confidence to exceed guidance in select areas, despite the raw material cost overhang affecting margins in the September quarter.