Buy Godrej Consumer Products; target of Rs 1485: Anand Rathi

Anand Rathi is bullish on Godrej Consumer Products has recommended buy rating on the stock with a target price of Rs 1485 in its research report dated December 10, 2024.

Broker Research

December 11, 2024 / 12:48 IST

Buy

26 Aug, 2025 12:21

Volume

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Anand Rathi's research report on Godrej Consumer Products

Godrej Consumer Products’ Q3 business update highlighted temporary headwinds. Flat Q3 volumes (vs. average ~7% y/y organic growth in H1 FY25 and in the last six quarters) are expected due to challenges in soaps and home insecticides (HI), which account for nearly two-thirds of domestic revenue. While 20-30% y/y higher palm oil prices drove price hikes, grammage cuts and reduced trade schemes led to lower volume growth (destocking) in soaps; the HI segment was hurt by the adverse weather (delayed winter in north India and a cyclone in the south). Further, on the high base of Q3FY24 standalone EBITDA margin, a sharp inflation in input cost could drag operating profits. Factoring in the above, we lower our FY25e-27e revenue ~5% and earnings 7-9%.

Outlook

However, we are optimistic about growth prospects, owing to the company’s industry-leading volume growth (as seen over the last six quarters), led by distribution initiatives and innovations. We maintain our Buy rating, with a lower 12-mth TP of Rs1,485 (Rs1,670 earlier), 50x FY27e EPS (52x FY27e EPS).

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