Godrej Consumer Products shares gain as East Africa business reorganization seem to aid cluster profitability
Godrej Consumer Products along with one of its wholly owned subsidiaries has entered into an agreement for divesting its entire stake in wholly owned subsidiary viz. Godrej East Africa Holdings Limited, Mauritius to HKG Africa Weave Ltd for $3.5 million. Upon the completion of the deal, Godrej East Africa Holdings along with its step down subsidiaries viz.
DGH Tanzania Ltd, Mauritius, Charm Industries Ltd, Kenya and Sigma Hair Industries Ltd, Tanzania will cease to be subsidiaries of the Company, Godrej Consumer Products said in an exchange filing. The deal shall be subject to various regulatory approvals in the respective countries, it added. Also Read: Kotak Mahindra Bank’s reshuffle likely to arrest top management attrition, say analysts; shares gain “This will lead to a negative revenue impact of ₹700 million for Q4FY24.
With this, GCPL has reorganized operations in Uganda, Angola, and Tanzania; the company now has to effect reorganization of its Kenya business," Emkay Global Financial Services said. With reorganization of the East cluster, Godrej Africa, USA, Middle East (GAUM) cluster revenue contribution would ease, from ~26% in FY23 to <20% in FY25, while absolute profit would see expansion, aided by the royalty plan. Emkay Global Financial Services believes that Godrej Consumer Products’ management is now dealing with two key concerns in consolidated operations: the new molecule-based HI offerings (across India, Indonesia), and improved show in the GAUM cluster.
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