Godrej Consumer Products Ltd. share price target

Overall sales growth was in line with our expectation. While sales in Soaps and the Africa business was healthy, the same in Household Insecticides (HI) disappointed for the second consecutive quarter. Macroeconomic worries are affecting performance in Indonesia. While FY21 initially promised to be stellar due to favorable outlook for Soaps, Hygiene products and HI, it now seems barely likely to cross double-digit growth despite a weak base in FY20. In its analyst meet in Dec'20, the company indicated that more work needs to be undertaken for all-round growth....

VENTURA DIWALI PICKS 2020

Gross margins dropped 61bps YoY to 56.0% impacted by higher operating cost. However, EBITDA rose 18.7% YoY, with EBITDA margins expanding 160bps YoY to 23.5%, supported by strong growth across the segments and lower selling and general expenses. Resultantly, adjusted...

Godrej Consumer Products (GCPL) result was in-line with our estimates. Revenue from soaps portfolio grew at high double digit rate while Hair Color recovered strongly compared to revenue growth of previous two quarters. However, performance of Household Insecticide segment was impacted by 20 days regional lockdown of manufacturing facility in Guwahati. In international business while revenue growth in Africa recovered strongly at double digit rate (after 5 quarter of decline), performance of Indonesia business declined (vs 1QFY21) due to COVID impact and down stocking by modern retailers. We expect growth rate in HI and Hair Color to improve going forward...

83% of the company's portfolio, related to health, hygiene and value for money, delivered 17% sales growth during the quarter. HI category posted mere 4% growth, was a negative surprise, especially considering 22% growth reported by Jyothy Lab in the same segment. We have upward revised our FY21E and FY22E EPS at Rs 17.1 and Rs 18.3, respectively and introduced FY23E EPS estimate at Rs 19.6. We believe that the recent correction in the price makes the stock attractive at CMP. Valuing GCPL at 38x FY23E earnings to arrive at a TP...

Godrej Consumer Products Limited's (GCPL) revenue grew by ~11% to Rs. 2,915.1 crore with India and international business growing by 11% and 12%, respectively. Domestic soaps category reported strong double-digit growth; household insecticide growth moderated to 4% due to supply disruption. On the international front, Africa and Indonesia grew by 10% and 5%, respectively, during the quarter. HI growth is expected to rebound due to higher consumer demand, while soap...

Household Insecticides will maintain good run in domestic market led by share gains and better penetration in rural markets; soaps regained growth momentum on improved supply and strong traction in key brands. Africa has recovered from lows with the region quickly exiting the pandemic situation; operational performance to be better in Q2. New leadership's focus on driving growth through faster innovations, cross pollination and shortening working capital cycle augurs well. Godrej Consumer Products (GCPL) clocked relatively better numbers in Q1FY2021...

14 September 2020 Indonesia posted healthy 17% EBITDA (adj.) growth to INR4.5b. Conversely, India EBITDA (adj.) fell 4.2% to INR14.2b and GAUM EBITDA (adj.) declined 14.6% to INR2.4b. Declines in India and GAUM were primarily attributable to the advent of COVID-19 in 4QFY20. For the first three quarters of FY20, India witnessed (adj.) EBITDA growth of 2% to INR11.2b, while GAUM EBITDA (adj.) remained flattish at INR2.

Gross margins contracted 280 bps YoY to 54.3% owing to adverse category mix. EBITDA however grew 3.0% YoY with EBITDA margins improving to 20.3% (+80bps YoY) on the back of reduced operational...

4 August 2020 Godrej Consumers (GCPL) 1QFY21 earnings were in line. Household Insecticides (HI) sales were better than expectations. However, Soaps disappointed with 2% YoY sales decline, despite a favorable environment. Gross margins were below expectations due to an adverse mix. A sharp 46% YoY cut in ad-spends meant that EBITDA was slightly ahead of expectations. We do not see any visibility for the single-digit EPS trajectory of the past 5 years to change materially any time soon. RoCE at less than 20% is also much lower than peers and is unlikely to improve materially over the next few years. Thus, valuation of 40.5x FY22E seems fair. EBITDA grew 3% YoY to INR4.7b (v/s est.