Stock

Broker's call: Godrej Conumer (Reduce)

| Updated on November 06, 2020 Published on November 06, 2020

HDFC Securities

Godrej Conumer (Reduce)

Target: ₹663

CMP: ₹670.40

Godrej Consumer Product Ltd’s Q2-FY21 was healthy with revenue/EBITDA growth of 11 per cent/19 per cent y-o-y. Domestic revenue/EBITDA grew by 11 per cent/17 per cent, while International revenue/EBITDA grew by 11 per cent/24 per cent.

Domestic volume growth was at 5 per cent, with market share gain. Secondary growth was ahead of primary growth for HI and soaps, reflecting healthy demand at the consumer level. Hair colours witnessed sequential recovery, but overall demand remained muted during the quarter. Indonesia and LATAM led the International margin expansion.

We expect healthy performance in H2-FY21, driven by demand and margin recovery in international business. We increase our EPS estimates for FY21 by 5 per cent. We roll forward our target price to Sep-22 EPS and value GCPL at 35x P/E to derive a target price of ₹663

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Published on November 06, 2020
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