Sharekhan's research report on Godrej Consumer Products
GCPL’s Q4FY2024 numbers were above our as well as street expectations due to better-than-expected OPM of 22.5%, leading to adjusted PAT growth of 22%; it achieved industry-leading organic volume growth of 9% (India business 7%). GCPL met its target of high single-digit underlying volume growth and high-teen EBITDA growth for FY2024. Management targets to achieve high single-digit volume growth for consolidated business with India and Indonesia business volumes growing in high single digits in the coming years. Consolidated EBITDA is expected to grow in mid-teens. RoCE will continue to improve in the medium term.
Outlook
We retain a Buy with a revised PT of Rs. 1,520. Management’s focus will help drive double-digit earnings growth in the medium term. The stock trades at 53x/46x its FY2025E/FY2026E EPS.
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