Godrej Consumer Products Ltd (GCPL) has signalled a significant turnaround in its business performance for the December quarter, driven primarily by a revival in domestic consumption. The company's pre-quarterly update for Q3FY26 points to a robust recovery, with consolidated revenue growth nearing double digits in rupee terms.
India Business Powers the Comeback
In its update, GCPL stated that the revival is being spearheaded by its India operations, which are expected to post double-digit volume growth. This marks a clear acceleration from the first half of FY26, when India volumes grew by a modest 4%. A key highlight is the anticipated return of India business EBITDA margins to their normalized range of 24-26%. This improvement is attributed to favourable input costs, calibrated pricing actions, and operating leverage. Consequently, consolidated EBITDA growth is also projected to be in double digits.
Analysts at Nomura Global Markets Research have revised their estimates upwards following the update. In a report dated 6 January 2026, they now forecast GCPL's revenue to have grown by 9.5% year-on-year, surpassing their earlier estimate of 6.7%. Their EBITDA growth projection has also been raised to around 12.8% on-year from 9.5%.
Segment-Wise Performance: Home Care in the Driver's Seat
The home care segment, which constituted 27% of GCPL's consolidated sales in FY25, is the primary engine of growth. It is expected to deliver double-digit value growth in Q3FY26. This performance is particularly notable as it has been achieved despite an unfavourable winter season, which typically dampens sales of household insecticides.
On the other hand, the personal care segment—contributing 32% to FY25 sales—is expected to register mid-single-digit growth. This is led by a long-awaited recovery in the soaps category after nearly ten quarters of flat or negative performance. Importantly, volumes excluding soaps had already been growing in double digits, indicating that the underlying health of the India business was stronger than the headline numbers previously suggested.
International Business Presents a Mixed Picture
While the domestic story is bright, GCPL's international performance remains patchy. Overseas operations, which accounted for about 39% of FY25 sales, show divergent trends. The Indonesia business, contributing 14%, shows early signs of stabilization but is still expected to see a year-on-year decline in Q3FY26 due to pricing pressure, with a meaningful recovery anticipated only from FY27. Nuvama Research estimates a 3% year-on-year sales decline with muted 2% volume growth for Indonesia in Q3, but believes the worst is over.
In contrast, the GAUM (Godrej Africa, US, and Middle East) business continues its strong run, delivering robust double-digit growth on key parameters.
Despite the improving operational outlook, GCPL's stock has risen a mere 8% over the past year. If the current momentum sustains, the company could exit its weak phase and deliver high single-digit consolidated revenue growth for FY26. However, with the stock trading at around 44 times its FY27 price-to-earnings ratio (Bloomberg data), a significant amount of optimism appears to already be priced in.
