This FMCG stock engaged in manufacturing and marketing personal care, home care, and hair care products across various global markets, jumped 4 percent after Goldman Sachs gave a buy target price of Rs. 1,370, which has an upside potential of 30.32 percent.
Stock Price Movement:
With a market capitalization of Rs. 1,11,252.12 crores, the share of Godrej Consumer Products Limited has reached an intraday high of Rs. 1090.70 per equity share, rising nearly around 3.75 percent from its previous day’s close price of Rs. 1051.25.
Since then, the stock has retreated and is currently trading at Rs. 1087.50 per equity share. The stock is currently trading at 29.35 percent below its 52-week high of Rs. 1,541.30
Company Overview:
Godrej Consumer Products Limited (GCPL) was established in 1897 by Ardeshir and Pirojsha Godrej. The company is a leading FMCG company headquartered in Mumbai, India. It manufactures and markets household and personal care products like soaps, hair care, insecticides, and air care under brands like Cinthol, Good Knight, and HIT. GCPL operates globally across more than 70 countries.
Target Price:
Goldman Sachs has maintained a buy rating on Godrej Consumer Products Limited and given a target price of Rs. 1,370, which has an upside potential of 30.32 percent from the previous day’s closing price of Rs. 1,051.25
Rationale:
Goldman Sachs has a positive outlook on GCPL, expecting strong volume and EBITDA growth in the coming years. They believe GCPL’s focus on high-margin domestic businesses, corrective actions, and improving growth prospects will drive this progress.
Goldman Sachs predicts EBITDA margins will return to normal levels within two to three quarters. They see the third-quarter performance as a one-off issue and expect GCPL to become the fastest-growing FMCG company by FY2026, with improving soap margins and strong insecticide growth.
Margin Guidance:
The management expects EBITDA margins to improve to the normal range of 24-26 percent within the next 6-8 months. Currently, margins in the India business stand at around 22.5 percent, suggesting there’s potential for growth and improvement.
Business segments highlights:
The company’s household insecticides segment is showing positive growth. They are gaining more market share in incense sticks and electric insect repellents. In other product areas like laundry, air fresheners, and sexual wellness, the company continues to see strong double-digit growth.
Meanwhile, their soap segment has seen stable revenue, performing better than the overall market. Despite flat revenue growth in soaps, the company maintains healthy EBITDA margins of around 20 percent.
Recent quarter results:
Godrej Consumer Products Limited’s revenue has increased from Rs. 3,660 crore in Q3 FY24 to Rs. 3,768 crore in Q3 FY25, which has grown by 2.95 percent. The net profit has also dropped by 14.29 percent from Rs. 581 crore in Q3 FY24 to Rs. 498 crore in Q3 FY25.
Written By – Nikhil Naik
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