Buy Godrej Consumer; target of Rs 1,550: Motilal Oswal

Motilal Oswal is bullish on Godrej Consumer has recommended buy rating on the stock with a target price of Rs 1,550 in its research report dated May 08, 2024.

Broker Research

May 09, 2024 / 12:35 IST

Buy

26 Aug, 2025 12:21

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Motilal Oswal's research report on Godrej Consumer

Godrej Consumer (GCPL) reported a 6% YoY consolidated net revenue growth to INR33.8b (exactly in line); constant currency (CC) growth was 30% YoY in 4QFY24. The India business clocked 12% YoY revenue growth (5% organic) with a volume growth of 15% YoY (7% organic). In India, the home care and personal care segments registered 6% and 4% YoY growth, respectively. The HI category was hit by a subdued season, especially in the North and East. Personal wash clocked high single-digit volume growth, sustaining its market share gain. The hair color volume growth was in double digits. RCCL clocked a strong 22% YoY growth with a sales run rate of INR1.4b during the quarter.

Outlook

We raise our EPS estimates by 1/3% for FY25/FY26. GCPL has improved the India business sales growth in recent years. It has delivered industry-leading volume growth in the India business over 9MFY24, and is likely to record double-digit EPS growth over FY24-26E. The implementation of disruptive innovations, the introduction of access packs, expansion into new growth categories, and increased advertising expenditure are anticipated to contribute to a consistently robust growth trajectory in this high-margin and high-ROCE domestic business. The company is consistently working towards expanding TAM for the India business along with product innovation to drive frequency. Besides, there has been a consistent effort to fix the gaps in profitability/growth for its international business. We reiterate our BUY rating with a TP of INR 1,550 (based on 55x FY26E EPS).

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