Religare's research report on Godrej ConsumerGCPL’s Q3FY16 net sales/EBITDA/adj. PAT grew 5.7%/17.2%/20.7% YoY led by robust domestic volume growth of 9% YoY. Revenues however came in 2% below RCMLe as FX headwinds (-7% YoY impact) restricted international business growth to 2% YoY (+9% YoY CC). EBITDA margins rose 190bps to 19.4% (RCMLe 18.8%) on lower RM costs. While valuations at 30.2x/26.4x FY17/FY18 earnings are fair and limit downside, we don’t expect any sharp re-rating from here on. HOLD; Mar’17 TP Rs 1,400 (Sep’16 TP Rs 1,350).While valuations at 30.2x/26.4x FY17/ FY18 are fair and limit upsides, we don’t expect any sharp re-rating from current levels due to the sluggish pick-up in demand and higher competitive intensity. We maintain HOLD and roll over to a Mar’17 TP of Rs 1,400 (Sep’16 TP: Rs 1,350).
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