Why GCPL snapped up Muuchstac for Rs 450 crore

Godrej Consumer Products Limited (GCPL), in a surprise, said it had acquired men’s grooming brand Muuchstac for Rs 450 crore, a deal announced alongside its latest quarterly results. The purchase marks the company’s growing appetite for profitable, digital-first consumer brands.

Muuchstac was founded in 2017 by Vishal Lohia and Ronak Bagadia, two entrepreneurs from Bhayander, a suburb of Mumbai. For several years, the business made modest progress, reaching revenues of around Rs 10 crore. Then, in 2023, came the “aha moment”. A single product, Muuchstac Face Wash, began to gain strong traction with consumers. The company decided to focus exclusively on that one SKU, which now contributes 90% of its revenue.

Muuchstac’s growth model has been unusual for a personal care brand. It relies solely on micro-influencer marketing, with no television advertising or paid promotions. “They only spend on a micro-influencer marketing model, no TV advertising or performance marketing,” said Sudhir Sitapati, CEO and managing director of GCPL, in a LinkedIn post.

The company’s bet on organic influencer content has paid off: Muuchstac Face Wash is now the number two men’s face wash online, and likely the number three across online and offline channels.

Despite its frugality, the brand’s numbers have been impressive. Expected to reach ₹80 crore in revenue within months, Muuchstac generates earnings before interest, tax, depreciation and amortisation (EBITDA) of around Rs 30 crore.

“After the first Rs 3 lakh that they put in during 2017-18, they haven’t lost money in a single year,” Sitapati wrote. “Their total capital outlay in this company has been Rs 3 lakh. Everything else has been funded by operational profit.”

For GCPL, the acquisition represents both a financial and strategic opportunity. The founders, who will continue to lead the business, reportedly made a return exceeding 15,000 times their original investment. “If so much could be achieved without any resources, one can only imagine what they’ll be able to do with the resources now available,” Sitapati said.

The deal reflects a broader shift among large consumer goods companies toward acquiring smaller, highly profitable digital-first brands. As Sitapati put it, “If anyone else knows of a new-age D2C business with numbers as good as this one, please write a comment or DM me.”