Time period given by analyst is one year when Godrej Consumer Products price can reach defined target.
Godrej Consumer Products Ltd., incorporated in the year 2000, is a Large Cap company (having a market cap of Rs 95628.03 Crore) operating in FMCG sector.
Financials
For the quarter ended 31-03-2021, the company reported a Consolidated Total Income of Rs 2747.31 Crore, down -10.52 % from last quarter Total Income of Rs 3070.45 Crore and up 24.71 % from last year same quarter Total Income of Rs 2202.96 Crore. Company reported net profit after tax of Rs 365.80 Crore in latest quarter.
Investment Rationale
Given the much superior margin and RoCE in its domestic business, this slowdown was a key factor behind the weak (~9%) consolidated earnings CAGR in the past five years ending FY21. Mr. Sitapati’s appointment fills another important piece of the puzzle that unlocks the path to strong earnings growth for GCPL, along with: a) better capital allocation efforts in recent years, b) appointment of a new head in the erstwhile significantly underperforming GAUM (largely Africa) business, with good initial results in the first year of his tenure in FY21, and c) potential tailwind in Soaps and Personal Wash products, led by more frequent usage post COVID-19, and a sharp increase in penetration levels in the Hand Wash category. Valuing GCPL at 46x Jun’23E EPS, the brokerage arrives at TP of INR1,070, a 16% upside to its CMP.
Promoter/FII Holdings
Promoters held 63.2 per cent stake in the company as of March 31, 2021, while FIIs held 26.6 per cent, DIIs 3.1 per cent and public and others 7.1 per cent.
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