Jefferies, JPMorgan, UBS bullish on GCPL despite Q3FY25 margin warning

GCPL in its commentary added that these 'exceptional situations' are transitionary and not structural, and the management will be able to navigate while maintaining investments for long-term growth.

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26 Aug, 2025 12:21

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GCPL is expecting a flattish volume growth in the December quarter, however, top brokerages are confident of the headwinds of slowdown subsiding soon.

FMCG major Godrej Consumer Products had on December 6 said that it is expecting sales growth in the mid-single digits for the third quarter, adding that demand conditions in the economy have been 'subdued' for the past few months.

During Q3FY24, GCPL had delivered exceptional margins of 29.7%, driven in part by favourable commodity prices. But the current inflationary environment has 'created pressure on the margins', the company said, adding that it anticipates a 'temporary downward breach' in the margin this quarter, from the normative range.

After this, CLSA lowered its target price for GPCL to Rs 1,000 with an Underperform rating, citing the Q3FY25 margin caution sounded off by the management. GCPL had also said that its December quarter margins will be lower than the normative range, with volumes in soaps and home insecticide segment poised to see a fall. These two categories contribute nearly a third to the domestic revenue.

JPMorgan, however, said the rest of the portfolio is expected to continue to do well, as the headwinds are not structural. It has remained Overweight on GCPL with a target price of Rs 1,410 per share.

Jefferies too has a Buy call with a target Rs 1,550 pointing out that the management sees the margin impact as a transitory issue.

UBS has a buy call on GPCL with a target of Rs 1,450, citing that the rest of the category is expected to see double-digit volume growth.

Goldman Sachs has a Buy on GCPL with a target price of Rs 1,375 per share.

GCPL in its commentary added that these 'exceptional situations' are transitionary and not structural, and the management will be able to navigate while maintaining investments for long-term growth. The international business continues to do well, with Indonesia expected to deliver mid-single digit volume growth and high single-digit sales growth.

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