Godrej Consumer Products Ltd. share price target

We reiterate Godrej is staring at a long gestation turnaround. Measures of reducing complexity and category development are steps in the right direction, however, take time in yielding results (some part of consensus was expecting a quick turnaround).

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).