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HDFC Securities Institutional Equities
HDFC Securities Institutional Equities has maintained Buy rating on Godrej Consumer Products Ltd. with Jun‑27 target price of R 1,250, based on 44x P/E, in line with the five year average forward P/E.
The brokerage highlighted that Godrej Consumer's thrust on execution is reflecting in healthy revenue momentum, which is capable of absorbing category disruptions well. However, high raw material dependence on imports has a bearing on its margin performance.
HDFC Securities expects the company to navigate setting with proactive actions and expect it to enhance its outlook. The company's key objective has been enhancing volume growth to double digits (9% achieved in Q1), turning around GAUM (achieved), and decisively turning around in HI in India (remain a seasonal tussle).
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Q1 result stood in line with estimate, with 19% topline, 15% Ebitda, and 10% earnings growth (lower non-operating income).
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