Buy Godrej Consumer; target of Rs 1450: Axis Securities

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26 Aug, 2025 12:21

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Axis Securities's research report on Godrej ConsumerGCPL’s acquisition of Strength of Nature, which is into wet hair care products for African women (CY15 sales of US$95mn with 60% of sales from US and 20% from Africa; EBITDA margin of 22%) will help it to establish a presence in the wet hair care market in Africa. GCPL through Darling is the market leader in the dry hair care in Africa. Key positives: Helps to enter the wet hair care segment, reasonable valuations (if media reports of Rs10bn value is correct), and for a change the debt and business will be in the same currency. Key issues: Entry into the US market means further geographical expansion and subscale brands (>15 brands in >3 geographies generate US$95mn sales). We incorporate this acquisition in our estimates: our EPS increases by 4% for FY17 and 3% for FY18. Maintain BUY with revised TP of Rs1,450 (based on 30x forward P/E) vs. Rs 1,360 earlier.

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