Motilal Oswal Stays Neutral On P&G Shares; Says Rich Valuations To Cap Upside

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Motilal Oswal Report

Two factors make Procter and Gamble Hygiene and Healthcare Ltd. an attractive long-term core holding:

Robust growth potential in the Feminine Hygiene segment (65-68% mix of FY24 sales), along with opportunities for market share gains supported by strategic initiatives, including the fortification of significant market advantages, and

Potential for higher margin gains from the long-term trend of premiumization in the Feminine Hygiene segment.

With a portfolio of essentials and healthcare, P&G focuses on customer acquisition through product innovation. Penetration play is expected to continue at a stable pace, despite the high scope of user additions. The stock trades at expensive valuations of 49x/45x FY26E/FY27E P/E.

We do not see any medium-term trigger. We reiterate a Neutral rating at a target price of Rs 15,000 (50x Mar’27E EPS).

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