ICICI Securities research report on Godrej Industries
Godrej Industries (GIL) generates major value from its listed subsidiaries and associates viz. Godrej Consumer, Godrej Properties and Godrej Agrovet. As per I-Sec target prices for Godrej Consumer, Godrej Properties and Godrej Agrovet and 50% holdco discount, GIL’s value works out to INR 764/share. At current market prices of listed subsidiaries and associates, GIL’s value works out to INR 786/share. The stock trades at a discount of 66% to combined market value of subsidiaries and associates. We believe subsidiaries as well as associates of Godrej Industries to be the net beneficiaries of revival in economy. We also model these businesses to benefit with value migration from unorganised to organised sector.
Outlook
We value GIL as per SoTP methodology at TP of INR 764. We maintain BUY rating on the stock. Prolonged losses (if any) of Godrej Capital may result in higher holding company discount.
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