Godrej Consumer Products Ltd. share price target

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...

GCPL under Sudhir Sitapati's leadership (see report Leadership Matters) is targeting double-digit UVG (underlying volume growth) over the medium term. No ifs and buts. We like it. The presentation was jargon-free (a rarity in Consumer Staples!); it had measurable targets and granular build-up of growth.
During the course of Sudhir's presentation, this analyst was reminded of strategy templates
presented by Nitin Paranjpe, CEO, HUL (2008 - 2013).

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...