Motilal Oswal has given Buy recommendation for Godrej Consumer recommended buy rating on the stock with a target price of Rs 1150 in its research rep with a target price of Rs. 1150 in its research report issued on Dec 20, 2021
Motilal Oswal’s research report on Godrej Consumer
The focus is on double-digit volume growth in the medium term: There was a clear emphasis on driving double-digit underlying volume growth (UVG) in the medium term. This would be achieved through: a) 50% coming from penetration gains in 50% of the portfolio, b) 15% from moderate market share gains in 50% of the portfolio, c) 25% from consumption-led market growth, and d) 10% from disruptive innovation. Key strengths of GCPL in Mr. Sitapati’s view: The new CEO emphasized on GCPL’s core strengths of innovation, quality obsession, and a very frugal cost mindset. He also highlighted its other strengths: robust processes, good market distribution (which is somewhat urban-centric), and a top notch portfolio, with potentially high growth core categories and geographies.
Outlook
There is no change to our EPS forecasts. We maintain our Buy rating on the stock with a TP of INR1,150 per share (valuing it at 45x Mar’24E EPS), implying an upside of 30% from current levels.