Buy Godrej Consumer Products: target of Rs 850: Sharekhan

Sharekhan's research repor on Godrej Consumer Products

Godrej Consumer Products Limited’s (GCPL) revenue grew by ~11% to Rs. 2,915.1 crore with India and international business growing by 11% and 12%, respectively. Domestic soaps category reported strong double-digit growth; household insecticide growth moderated to 4% due to supply disruption. On the international front, Africa and Indonesia grew by 10% and 5%, respectively, during the quarter. HI growth is expected to rebound due to higher consumer demand, while soap will maintain the growth momentum; Africa and Indonesia will maintain the steady performance. We broadly maintain our earnings estimates for FY2021/FY2022/FY2023.

Outlook

We retain our Buy rating on the stock with unchanged PT of Rs. 850 in view of better growth prospects and discounted valuation of 29.5x its FY2023 EPS.

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