Sharekhan has given Buy recommendation for Godrej Consumer Products with a target price of Rs. 1000 in its research report issued on Sep 28, 2022
Sharekhan’s research report on Godrej Consumer Products
Godrej Consumer Products Limited (GCPL) is strengthening its last-mile distribution, simplifying portfolio with SKU rationalisation, focusing on relevant launches in key categories, investing in consumer awareness, and accelerating wet Hair/FMCG growth, which will drive consistent double-digit growth for Africa business. Africa business’s margins are expected to scale-up from earlier levels of 10-12%, driven by efficiencies at production and procurement level, reduction in fix costs, and better mix in the coming years. Correction in crude prices, freight rates, and palm oil prices (corrected by 60% from April 2022 high) will provide good support to GCPL’s overall OPM going ahead.
Outlook
The stock is currently trading at 44.7x and 38.2x its FY2023E and FY2024E earnings, respectively. We maintain Buy with a revised PT of Rs. 1,000.