Sharekhan's research report on Godrej Consumer Products
Godrej Consumer Products Limited’s (GCPL’s) Q3FY25 performance was muted with revenue growth of 3% y-o-y (domestic volume growth stood flat), OPM fell by 466 bps y-o-y to 20.1% and adjusted PAT declined by 18% y-o-y. Management expects domestic volume and value growth to improve sequentially in Q4. It eyes a low-mid single-digit volume growth in FY25 (stood at 7% in H1FY25 and flat in Q3). If raw material prices remain stable, management eyes 24% OPM for domestic business (lower end of normal range of 24-26%) in 6-8 months.
Outlook
Stock has corrected 27% from its recent high and trades at 62x/49x/41x its FY25E/FY26E/FY27E EPS, respectively. We maintain a Buy with an unchanged PT of Rs. 1,355.
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