Accumulate Godrej Consumer: Way2Wealth

“Godrej Consumer (GCPL) is present in 3 segments namely soaps, household insecticides & hair colours. In each of these segments the company is a market leader or at No. 2 position. The company has been continuously investing behind its brands to gain ground over competition & have created super brands over the decade. The company’s 3x3 strategy (presence in 3 continents and 3 categories) shows its clear focus to attend to its strengths rather than diversify into the unknown. Cross synergies from continents will enable growth across geographies & segments & help the company achieve its target of 20%+ topline grow for next 3-4 years.”

“The company is on a healthy growth trajectory for the next few years on the back of its organic growth, cross launches across geographies, & product innovation. Profitability to improve as the company moves to premiumise its portfolio & indulge in cost synergies. We like the vision of the management to grow the business while investing in emerging economies. It plans to focus on it 3 mainstay segments where it commands market leadership. At the current CMP of Rs 450.5 the stock trades at 21x& 20x FY12 & FY13 expected EPS of Rs 21 (includes Rs 5 exceptional item) & Rs 23 respectively. We recommend the investors to “Accumulate” the stock for 15%+ upside from these levels," says Way2Wealth research report.

Institutional holding more than 40% in Indian cos

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