Buy Godrej Consumer Products; target of Rs 810: Sharekhan

Sharekhan's research repor on Godrej Consumer Products

Q1FY2021 numbers were resilient - Consolidated revenues were flat, while OPM expanded by 77 bps driving up adjusted PAT by 6%. Domestic volumes grew 3%. Household insecticides (HI) grew by 27% and hygiene products rose by 15%. Around 85% of global portfolio grew by 9% during the quarter. Management expects HI category to retain strong show in India and Indonesia, gradual recovery in Africa business and strong traction in new products would help GCPL perform better in coming quarters. New leadership focuses on sustainable revenue growth, steady improvement in OPM and return ratios.

Outlook

We maintain our Buy recommendation with unchanged PT of Rs. 810.

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