Q4FY2020 consolidated revenues declined by 12.2% and adjusted PAT fell by ~30%, affected by supply disruptions in India and Africa due to a lockdown; Indonesia business registered stable performance. April began on positive note with household insecticide (HI) sales growing in India and Indonesia on account of higher demand; with capacity utilisation improving to 75% in all plants in India the company expects supply of products to stabilise in the coming months. Resurgence of HI category; expanding other key categories through innovation and cost control measures would help GCPL clock steady earnings growth in the medium term. Stock has corrected by ~16% in last three months and is currently trading at discounted valuation of 30.6x its FY2022E earnings factoring in near-term uncertainties.
OutlookWe maintain our Buy recommendation with revised PT of Rs. 630.
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