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Rs 1 trn m-cap regained by Godrej Consumer

hits 52 weeks high on strong Q4 update

Godrej Consumer Products ( GCPL ) regained Rs 1 trillion in market capitalization (market capitalization) after shares of the personal care products maker touched a 52-week high of Rs 978.50, up 1 percent on the BSE in intraday trade on Thursday. The feat comes after Godrej Consumer India posted strong double-digit volume and value growth in the March quarter (Q4).

On a consolidated basis, the company expects to achieve double-digit growth in rupee terms led by mid-digit volume growth. Gross margin recovery and continued marketing investment should translate into strong double-digit Ebitda growth, the company said.

Over the past month, Godrej Group shares have outperformed the market by 6 percent compared to a 0.51 percent decline in the S&P BSE Sensex. In addition, it has risen 29 percent over the past year versus a 0.51 percent increase in the benchmark index. It hit a record high of Rs 1,138.50 in September 2021.

GCPL ranks among the largest players in household insecticides, air care and hair care in the emerging markets of India, Indonesia and Africa. In household insecticides, the company is the leader in India, the second largest player in Indonesia and expanding its presence in Africa.

“In India, consumer demand trends remained stable during the quarter, with the FMCG sector expected to witness a gradual recovery in growth rates. The performance of our India business exceeded expectations, particularly on the volume front,” GCPL said in a quarterly update.

The company expects to achieve double-digit volume and value growth. Overall, growth was broad-based and led to double-digit volume and value growth in home care and personal care, GCPL said.

Business in Indonesia has started to see a gradual recovery in performance with constant currency sales growth in the mid-single digits. Ex-Hygiene’s growth is close to double digits. “We believe the building blocks in Indonesia are in place to deliver stable to strong performance in the next fiscal year,” the company said.

Godrej Africa, US and Middle East (GAUM) is delivering higher than single digit revenue growth in constant currencies, he added.

Motilal Oswal Financial Services (MOFSL) expects the sharp decline in palm oil prices to lead to a gradual and year-on-year improvement in GCPL’s gross margins. Despite likely higher ad spend, year-on-year EBITDA growth for 4QFY23 and beyond is likely to be over 25 percent, the brokerage said in its preliminary results report.

We would keep an eye on the outlook in the household insecticides category and comment on GAUM and Indonesia business, MOFSL said.

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