Godrej Consumer, Dabur, HPCL, Radico, Aptus Value, Sapphire Foods, Sonata & More Q4 Review: HDFC Securities

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HDFC Securities Report

Godrej Consumer - Operating margins remain strained

Godrej Consumer Products Ltd.’s Q4 FY25 results were below our estimates, owing to the lower-than-expected performance of the domestic business (Ebitda margin contracted 410 bps YoY). Management highlighted inflation in palm oil prices and stress in urban consumption as key reasons for the sub-par performance.

The subdued domestic performance was partially offset by the margin uptick seen in the international business.

We maintain our Buy rating on GCPL with a target price of Rs 1,400/share (50x its FY27 consolidated EPS, 25% premium to its five-year average PE), with revenue/Ebitda/PAT CAGRs of 10/14/18% for FY25-FY28E.

In our view, growth will be driven by-

1. India and Indonesia (70% of consolidated sales) being poised for mid to high single-digit volume growth, led by sustained focus on brand building and category creation and

2. further profitability improvement in GAUM.

HPCL - Marketing margin down

Our REDUCE rating on Hindustan Petroleum Corporation Ltd. with a revised price target of Rs 335 is premised on the risk of lower auto-fuel marketing margins and elevated debt levels, given the high capex cycle. Q4 FY25 Ebitda came in at Rs 58 billion (+20.8% YoY, -2.8% QoQ), while PAT came in at Rs 33.5 billion (+18% YoY, +11% QoQ), ahead of our estimate, owing to higher-than-expected refining margins and inventory gains while offset by lower than estimated marketing margin.

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