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Dolat Capital Report
Godrej Consumer Products Ltd.'s Q2 FY24 revenues were in line with our estimate but profitability was a miss. The company reported 11% volume growth in India business.
During the quarter, Godrej Consumer Products' domestic organic business posted 4% volume growth on a base of 5% volume de-growth. Home care segment reported 5% sales growth driven by double digit growth in air fresheners, however, flat growth in household insecticide was a disappointment.
We have downward revised our FY24/25E earnings per share estimates by 8.6/6.9% at Rs 18.6/22.0 to factor in Q2 performance and introduced FY26E EPS at Rs 24.6.
We remain concerned about the consistency in HI business. Valuing the stock at 42 times FY26E EPS we arrive at target price of Rs 1,033. Maintain 'Reduce'.
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