Buy Godrej Consumer; target of Rs 1400: Motilal Oswal

Motilal Oswal's research report on Godrej Consumer

Godrej Consumer’s (GCPL) consolidated revenue rose 10% YoY to INR36.6b (est. INR36.8b), while volume growth stood at 8%. EBITDA declined 4% YoY (est. +4%) due to weak India and Indonesia margins. India’s revenue rose 8%, while volume grew 5%. Ex-soaps, volume growth was in mid-teens. Home Care delivered 16% revenue growth. HI delivered high single-digit volumes, led by double-digit growth in electrics. Air Fresheners and Fabric Care delivered strong double-digit volume growth. The Personal Care portfolio posted 1% YoY revenue growth. Personal Wash witnessed a price-volume rebalancing due to commodity volatility, resulting in flattish revenue. Hair Color volume grew in strong double digits. Deodorants and Sexual Wellness grew in mid-teens.

Outlook

The company is on track to expand its TAM and strengthen its core portfolio. Under project Vistaara 2.0, the company plans to double its outlet coverage and triple its village coverage. Given the growth-centric focus, we remain constructive on GCPL and reiterate our BUY rating with a TP of INR1,400 (based on 50x Jun’27E EPS).