Godrej Consumer Products shares slumped over 4 percent on Friday after the company reported lower-than-expected quarterly earnings. At 11:43 am, the shares were trading 3.3 percent lower at Rs 920.9 apiece on the BSE.

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The company's consolidated net profit grew 4.6 percent YoY to Rs 479 crore for July-September, while revenue was up 8.5 percent to Rs 3,163.6 crore.

Analysts in a CNBC-TV18 poll had predicted the company's quarterly net profit to be Rs 494 crore over a revenue of Rs 3,175 crore.

Sameer Shah, Head of Finance and Investor Relations, Godrej Consumer Products, pointed out that 3/4th of its margin drop is led by palm oil inflation. Shah cautioned that the margin will be at parity over the next couple of months.

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Morgan Stanley said inflationary pressures may keep weighing on the company's margin in the near term. The brokerage has an 'underweight' stance on the stock.

Strategic update from the new CEO Sudhir Sitapati would be a key monitorable, Morgan Stanley said.

Credit Suisse has cut FY22-24 earnings per share estimates for the company by 2-5 percent to factor in steep commodity inflation.

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"While near-term margin pressure is evident, we expect the company to overcome it as benefits of price hikes begin to flow in. With demand drivers in place across home care and personal care, we continue to see steady growth for GCPL," said HDFC Securities.

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