Chalk And Cheese: Godrej Consumer Q1 Update Has Morgan Stanley Bullish; Macquarie Cautious

Godrej Consumer Products Ltd.'s shares have risen over 4% after its pre-quarter update for the April-June period of financial year 2026. While both Macquarie and Morgan Stanley acknowledge healthy top-line growth, particularly in the home care segment, their outlooks are split on profitability and margin.

Morgan Stanley emphasised the strong beat and future growth prospects with a target price of Rs 1,431. While Macquarie, remains cautious on margin expansion and maintains a neutral stance with a Rs 1,200 price target.

Morgan Stanley's report emphasised that the company's Q1 consolidated revenue posted double-digit growth, surpassing their estimates by 5% and achieving 7% organic growth in the fourth quarter of financial year 2025.

This was accompanied by high-single-digit consolidated volume growth, improving sequentially from 5%. Excluding soaps, volume growth was even stronger, registering double digits. Specifically, India's revenue saw high-single-digit growth, with volume up by mid-single digits, improving sequentially.

Home care notably delivered double-digit value and volume growth. While personal care experienced low-single-digit growth due to price-volume rebalancing, and Ebitda margins remained below the company's normative range, the overall performance was strong, according to the brokerage.

Macquarie's key takeaways include healthy mid-single-digit volume growth in India, aided by double-digit home care volume growth. They also noted high-single-digit value growth in India and double-digit consolidated sales growth.

Macquarie anticipates the first quarter Ebitda margin to be below the 24-27% normative range. They expect 5% volume growth with consolidated sales up 10%, but expects Ebitda to rise only 7% year-on-year, indicating margin pressure.

The analyst highlighted that while double-digit volume growth in home care is positive, the near-term momentum in the home insecticide sales remains crucial. They also point out that the company's first quarter Ebitda margin will be below its normative range, suggesting potential pressure on profitability.

Godrej Consumer Products stock rose as much as 5.96% during the day to Rs 1,264 apiece on the NSE. It was trading 4.12% higher at Rs 1,242 apiece, compared to a flat benchmark Nifty 50 as of 10:25 a.m.

It had declined 9.86% in the last 12 months and 14.48% on a year-to-date basis. The total traded volume so far in the day stood at 16 times its 30-day average. The relative strength index was at 52.4.

Twenty nine out of 38 analysts tracking the company have a 'buy' rating on the stock, seven recommend a 'hold' and two suggest a 'sell', according to Bloomberg data. The 12-month analysts' consensus target price on the stock is Rs 1,369, implying an upside of 10.6%.