Gillette India Shares Surge 7% Despite Dip in Quarterly Profit Amidst Fierce Market Competition

Despite Gillette India reporting a slight decline in third-quarter profit due to intensified domestic competition, shares of the company soared by 7% in Tuesday’s trading session. Gillette India, renowned for its Mach 3 brand of shaving razors, posted a profit of ₹99.09 crore for the January-March quarter, marking a 3.5% decrease compared to the same period last year when the profit stood at ₹103 crore.

The consumer goods sector, including companies like Gillette India, is grappling with heightened competition from smaller manufacturers, who, buoyed by declining commodity prices, are gaining traction and securing shelf space in the market.

Despite the profit setback, Gillette India witnessed a notable increase in revenue from its core grooming segment, which accounts for 82% of its total revenue. The segment reported a nearly 10% rise in revenue to ₹680.74 crore, accompanied by a 6.3% reduction in the cost of raw materials consumed.

Gillette India’s Earnings Before Interest, Tax, Depreciation, and Amortisation (EBITDA) for the quarter remained steady at ₹160.34 crore compared to the previous year, with the margin expanding from 21.6% to 23.6%.

Segment-wise analysis revealed positive performance in the grooming business, with revenue climbing by 13.5% to ₹557.7 crore. The EBITDA for the grooming segment witnessed a robust growth of 30.4%, with margins improving from 18.6% to 21.4%.

Gillette India attributed its market share gains in the core blades and razor segment to distribution expansion initiatives, the success of its female hair removal range, and increased demand for trimmer and shaver products. Notably, the female range contributed approximately 15% to grooming sales.

Meanwhile, parent company Procter & Gamble Co. had earlier revised its annual core profit forecast upwards in April, citing price increases and resilient demand as driving factors.

Despite the quarterly profit decline, investors demonstrated confidence in Gillette India, propelling its shares to a 7.24% increase to ₹6,658 apiece on the NSE. Over the past 12 months, the stock has surged by nearly 50%, reflecting investor optimism and the company’s strategic resilience in navigating competitive market conditions.

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