Godrej Consumer Products Ltd., incorporated in the year 2000, is a Large Cap company (having a market cap of Rs 75464.60 Crore) operating in FMCG sector.
Financials
For the quarter ended 31-12-2020, the company reported a Consolidated Total Income of Rs 3070.45 Crore, up 4.83 % from last quarter Total Income of Rs 2929.06 Crore and up 9.60 % from last year same quarter Total Income of Rs 2801.57 Crore. Company reported net profit after tax of Rs 501.90 Crore in latest quarter.
Investment Rationale
Over FY10-20, GCPL posted healthy growth on all fronts. However, a domestic sales slowdown in recent years and continued inability to scale up margin and improve weak RoCE in the international business has adversely affected the pace of earnings growth. The loss of dominance in Hair Color, the advent of unorganized incense stick players in HI, and weak execution in the Africa business remains areas of worry. Although close to 30% topline performance in 4QFY21 is encouraging, it is on a soft base of a 12.2% sales decline in 4QFY20 due to the COVID-19 led lockdown. Given the uncertain outlook and inferior RoCE v/s peers, valuations of 35x Mar’23E EPS appear fair.
Promoter/FII Holdings
Promoters held 63.2 per cent stake in the company as of Dec 31, 2020, while FIIs held 26.8 per cent, DIIs 3.1 per cent and public and others 6.9 per cent.
