Godrej Consumer margin improved, but the stock fell 5.26% after results
Consolidated net profit grew 9.68% YoY as lower taxes offset weak other income and limited pre-tax profit growth to 1.89%.
Filed 06 May 2026, 16:19 IST · after market close · Godrej Consumer Products Ltd (GODREJCP)
Key takeaways
- Revenue grew 8.41% YoY while expenses grew 7.76%, lifting operating margin by 0.47 percentage points to 21.57%.
- Net profit rose 9.68% YoY, helped by a 4.93-percentage-point reduction in the tax rate to 30.65%.
- The stock fell 5.26% on the results day, a larger move than its 2.88% median reaction after the past eight results.
Price around the results
Operating leverage lifted the consolidated margin
Godrej Consumer Products' consolidated revenue grew 8.41% YoY, while expenses rose 7.76%, allowing operating profit to grow 10.82%. That pushed operating margin up 0.47 percentage points to 21.57%. The margin was 4.82 percentage points above the 16.75% median for 26 Fast Moving Consumer Goods peers that had reported the quarter.
Lower tax drove more of the profit growth than pre-tax earnings
Pre-tax profit grew only 1.89% YoY, while net profit rose 9.68%, because the tax rate fell 4.93 percentage points to 30.65% and tax expense declined 12.22%. Other income was negative and represented -3.61% of pre-tax profit, so it did not support earnings quality in the quarter. Sequentially, interest expense rose 14.35% and the tax rate increased 1.78 percentage points, contributing to the 9.27% decline in net profit.
Margin expansion has now run for three straight quarters
Operating margin rose from 18.97% in Q1FY26 to 19.17% in Q2FY26, 21.48% in Q3FY26 and 21.57% in Q4FY26. This is the third consecutive quarterly improvement, although Q4 revenue fell 4.85% sequentially. Expenses fell slightly faster than revenue sequentially, declining 4.96%, which supported the 0.09-percentage-point margin improvement.
The market reaction was unusually negative for this stock
The stock fell 5.26% on the first trading day after the consolidated results, with a 5.56% decline by day five and an 8.55% decline by day 30. That compares with a 2.88% median absolute move after the past eight results, during which the stock rose three times and fell five times.
Q4FY26 at a glance
Consolidated figures as filed with NSE — cross-checked against an independent source.
| Line item | Q4FY26 | Q3FY26 | QoQ | YoY |
|---|---|---|---|---|
| Revenue | ₹3,900 cr | ₹4,099 cr | -4.85% | +8.41% |
| Other income | ₹-24 cr | ₹-35 cr | +32.98% | — |
| Expenses | ₹3,059 cr | ₹3,219 cr | -4.96% | +7.76% |
| Operating profit | ₹841 cr | ₹880 cr | -4.43% | +10.82% |
| Operating margin (%) | 21.57% | 21.48% | — | — |
| Interest | ₹90 cr | ₹79 cr | +14.35% | +0.79% |
| Depreciation | ₹76 cr | ₹66 cr | +14.64% | +4.93% |
| Profit before tax | ₹651 cr | ₹700 cr | -6.93% | +1.89% |
| Tax | ₹200 cr | ₹202 cr | -1.17% | -12.22% |
| Net profit | ₹452 cr | ₹498 cr | -9.27% | +9.68% |
| EPS (₹) | ₹4.42 | ₹4.87 | -9.24% | +9.68% |
Operating margin of 21.57% compares with a Fast Moving Consumer Goods sector median of 16.75% across 26 peers that have reported Q4FY26.
How the stock reacted
| Window | Stock | vs NIFTY |
|---|---|---|
| Results day | -5.26% | -5.24% |
| Next session | -4.73% | — |
| 5 sessions | -5.56% | -2.92% |
| 15 sessions | -5.92% | — |
| 30 sessions | -8.55% | — |
Volume on the results session was 3.67× its 20-day average.
What to watch
- Whether consolidated operating margin holds above 21.57% after three consecutive quarterly increases.
- Whether the tax rate remains near or below 30.65%, after the 4.93-percentage-point YoY decline.
- Whether interest expense moderates from the 14.35% sequential increase.