Godrej Consumer Share Price Falls Despite Solid Q4 Business Update

Godrej Consumer Products Ltd.'s shares fell nearly 3% on Monday even as the company posted a March-quarter business update that was slightly ahead of expectations, according to Morgan Stanley. This comes amid a broader market selloff due to global risk sentiments, following US President Donald Trump's reciprocal tariffs and counter tariff by various nations.

The company remains largely on track with its stated objectives for the quarter, which included reviving underlying volume growth in the standalone business, maintaining Ebitda margins despite input cost pressures, and sustaining momentum in international operations, according to a business update.

Standalone volume growth is expected to be in the mid-single digits, driven by a mid-teens increase in home care volumes and a mid-single digit decline in personal care. Revenue growth is estimated to be in the high-single digits. Ebitda margins are likely to be broadly in line with the third quarter, despite continued inflation in palm oil and related derivatives.

International businesses also continued to perform well. The Indonesia segment is expected to post mid-single digit volume growth and low-single digit revenue growth. The Godrej Africa, United States and Middle East business is likely to deliver strong double-digit organic growth in both volumes and revenue. At the consolidated level, the company expects high-single digit sales growth in rupee terms and mid-single digit volume growth.

Following this update, Morgan Stanley retained an ‘equal-weight’ rating on the stock and a target price of Rs 1,231 apiece. It said the quarter was slightly ahead of estimates, led by strong performance in the Godrej Africa, United States and Middle East segment, and expects Ebitda margins to hold near 22.9%.

Godrej Consumer stock fell as much as 2.73% during the day to Rs 1,125.05 apiece on the NSE. It was trading 0.51% higher at Rs 1,162.50 apiece, compared to a 3.88% decline in the benchmark Nifty 50 as of 10:55 a.m. 

It has fallen 7.48% in the last 12 months and 3.9% on a year-to-date basis. The relative strength index was at 71.72.

Twenty six out of 36 analysts tracking the stock have a 'buy' rating, eight recommend a 'hold' and two suggest a 'sell', according to Bloomberg data. The 12-month analysts' consensus target price on the stock is Rs 1,280.44, implying an upside of 10.7%.