Buy Godrej Consumer Products, target price Rs 1210: Motilal Oswal Financial Services
Godrej Consumer Products with a target price of Rs 1210.0. The current market price of Godrej Consumer Products is Rs 1089.1.
Godrej Consumer Products, incorporated in the year 2000, is a Large Cap company (having a market cap of Rs 111439.76 Crore) operating in FMCG sector.
Godrej Consumer Products key Products/Revenue Segments include Personal Care and Other Operating Revenue for the year ending 31-Mar-2023.
Investment Rationale
GCPL has been progressing well toward improving its India business sales growth in recent years. Disruptive innovations, access packs, and higher but concentrated ad spending should result in consistently healthy growth in this high-margin and high-ROCE domestic business.
The profitability outlook is also gradually improving in the overseas business, evident in double-digit growth in key geographies in 1HFY24.
Working capital enhancement, particularly in the international segment, is also progressing as planned.
The management is confident in the acquired projects, anticipating accelerated booking growth and increasedcash flow. GCPL will continue to invest in the Indian business, seizing opportunities as they arise, with no further investment planned for the international business.
Going forward, capital will be allocated appropriately.
We reiterate our BUY rating with a TP of INR1,210 (based on 45x Sep?25E EPS) given robust earnings growthprospects and expected improvements in return ratios.
Financials For the quarter ended 30-09-2023, the company has reported a Consolidated Total Income of Rs 3667.88 Crore, up 4.26 % from last quarter Total Income of Rs 3518.02 Crore and up 6.88 % from last year same quarter Total Income of Rs 3431.79 Crore.
