Godrej Consumer Products Ltd. share price target

We have revised our FY26E/FY27E EPS estimates by -5.7%/-1.9%, as we factor in weaker EBITDA margins led by contraction in gross margins. We reiterate our “ACCUMULATE” rating on the stock, supported by its volume-led growth strategy. We expect margin pressure to remain persistent in the near term
but expect gradual recovery from H2FY26E onwards

Godrej Consumer (GCPL)’s FY25 strategy focused on expanding the existing categories by innovating products across various sizes and price points while broadening distribution to enhance consumer reach, streamlining operations through radical simplification by reducing SKUs, personnel, and processes.

*over or under performance to benchmark index cant market share gains across portfolio. Growth of the personal care segment was flat, with 1.0% YoY increase, mainly due...

We hosted Vishal Kedia, who heads Global Strategy at GCPL, at our recent conference Emkay Confluence 2025 with a group of investors, to gauge the company’s strategy ahead and assess its recent performance.

Godrej Consumer’s (GCPL) consolidated revenue rose 10% YoY to INR36.6b (est. INR36.8b), while volume growth stood at 8%. EBITDA declined 4% YoY (est. +4%) due to weak India and Indonesia margins.

GCPL’s Q4FY25 performance was soft with consolidated revenue growing by 6% y-o-y with a 5% volume growth, OPM declining by 136 bps y-o-y to 21.1% and adjusted PAT lower by 21.2% y-o-y to Rs. 443 crore.

With 6% volume growth (4% in India business) and 21.1% EBITDA margin (Street’s estimate at 20.4%), Godrej Consumer posted broadly in-line Q4 results.

We maintain BUY on GCPL while raising our Mar-26E TP by ~6% to Rs1,400 (on 50x P/E) from Rs1,325, as we upgrade earnings by 3-4% over FY26-27E on improved margin performance.

We recently upgraded GCPL to BUY from Reduce, as we see that most headwinds are in the base. GCPL has capability of recovering business, given prudent execution.

Godrej Consumer (GCPL) reported a 3% YoY increase in consolidated net revenue to INR37.7b (est. INR37.5b). Constant currency organic revenue growth was at 2% YoY.

GCPL’s Q3FY25 performance was weak as domestic business posted muted 3.6% y-o-y revenue growth (flat volume growth) and a sharp 672 bps y-o-y decline in OPM, which dragged PAT down by 27.7% y-o-y. Multiple headwinds such as a slowdown in urban consumption, surge in palm oil prices and poor season for household insecticides affected domestic performance in Q3.

GCPL has been a play on execution for a couple of years now. Our downgrade (to Reduce) after the Q3 business update factored in concerns on slowdown in/waning of execution.

Extreme weather patterns impacted sales of Household Insecticides. Soap volumes were soft on destocking due to price rises

Godrej Consumer Products’ Q3 business update highlighted temporary headwinds. Flat Q3 volumes (vs. average ~7% y/y organic growth in H1 FY25 and in the last six quarters) are expected due to challenges in soaps and home insecticides (HI), which account for nearly two-thirds of domestic revenue.

Godrej Consumer Products (GCPL) pointed to a weak Q3FY2025 in its pre-quarter business update affected by flat sales volumes and a margin dip in the India business. Domestic sales volumes growth would be flat (vs. average 7% volume growth in last six quarters) owing to lower soap sales and HI sales volumes (that contribute ~67% to India business).

With 2% y/y consolidated revenue growth (vs. the Street’s estimated 1%) and Rs7.6bn EBITDA (Rs7.5bn), Godrej Consumer’s Q2 was broadly in line with expectations.

Compared to Bloomberg consensus, sales were 1% higher but EBITDA beat was 4% as margins came in 60bps above expectations

Godrej Consumer Products Limited’s (GCPL’s) Q2FY2025 performance was in line with expectations with revenue rising ~2% y-o-y (high single-digit domestic volume growth), OPM rising by 70 bps y-o-y to 20.8% and adjusted PAT growing by 12% y-o-y.

Godrej Consumer Products (GCPL) has adopted a growth-oriented strategy that includes pursuing acquisitions, cross-selling, entering new categories, and expanding the Total Addressable Market (TAM) for existing products.