Buy Godrej Consumer; target of Rs 1150: Motilal Oswal

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Motilal Oswal's research report on Godrej Consumer

Godrej Consumer (GCPL) is our top pick from our Staples Coverage Universe from a oneyear horizon. We list some of our key investment arguments and aim to track the company’s progress in its segments thus far. Recent sales growth momentum encouraging: After maintaining a Neutral view on GCPL for 10 years, we turned bullish on its prospects earlier this year, as highlighted in our upgrade note from May’21; we reiterated our view in our detailed note from Jun’21. Our positive view on the investment case is bolstered by the strong revival in the domestic topline seen over the last 21 months (after a lackluster second half in the previous decade). The healthy double-digit domestic sales growth in 9MFY22 (on a double-digit base in FY21) was particularly encouraging. GCPL’s balance sheet also continued to strengthen in 1HFY22, with RoCE exceeding 20%.

Outlook

We maintain our BUY rating on the stock, with TP of INR1,150 (valuing it at 45x FY24E EPS), implying an upside of 26%.

More Info

At 17:30 Godrej Consumer Products was quoting at Rs 924.95, up Rs 10.30, or 1.13 percent.

It has touched an intraday high of Rs 925.60 and an intraday low of Rs 909.10.

It was trading with volumes of 16,626 shares, compared to its thirty day average of 25,521 shares, a decrease of -34.85 percent.

In the previous trading session, the share closed down 1.80 percent or Rs 16.80 at Rs 914.65.

The share touched its 52-week high Rs 1,138.50 and 52-week low Rs 644.00 on 03 September, 2021 and 24 February, 2021, respectively.

Currently, it is trading 18.75 percent below its 52-week high and 43.63 percent above its 52-week low.

Market capitalisation stands at Rs 94,583.64 crore.

For all recommendations report, click here

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