Sharekhan's research report on Godrej Consumer Products
Godrej Consumer Products Limited’s (GCPL’s) Q1FY2024 performance was a mixed bag with volume-led revenue growth of 10% (in line with ours as well as the street’s expectation) while OPM lagged expectation at 19.8% (vs expectation of 20.7-21%). India business’ performance will be driven by sustained double-digit growth in HI category. International business will be driven by strong recovery in Indonesia business; Africa to remain volatile due to currency revaluation. OPM to remain at ~19-20%. The company will be investing Rs. 900 crore to expand existing capacity by 20-25%, which will take care of the rising demand and help in improving the productivity.
Outlook
We retain our Buy rating with an unchanged PT of Rs. 1,250. The stock is currently trading at 48x/40x its FY2024E/FY2025E EPS.
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