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Motilal Oswal Report
Godrej Consumer Products Ltd. reported a 6% YoY consolidated net revenue growth to Rs 33.8 billion (exactly in line); constant currency growth was 30% YoY in Q4 FY24. The India business clocked 12% YoY revenue growth (5% organic) with a volume growth of 15% YoY (7% organic).
In India, the home care and personal care segments registered 6% and 4% YoY growth, respectively. The household insecticide category was hit by a subdued season, especially in the North and East. Personal wash clocked high single-digit volume growth, sustaining its market share gain. The hair color volume growth was in double digits. Raymond Consumer Care Ltd. clocked a strong 22% YoY growth with a sales run rate of Rs 1.4 billion during the quarter.
The international performance was hit by forex. Indonesia's revenue was up 15% YoY (17% in CC) with a healthy underlying volume growth of 12%. Godrej Africa, the US, and the Middle East's revenue performance was hit by the devaluation of the naira; it posted +16% YoY growth in CC terms.
Godrej Consumer clocked strong volume growth in FY24 and aims to deliver high singledigit volume growth in FY25. The company plans to keep expanding its total addressable market. It is also looking to gain share in rural markets by expanding its market reach. Under Project Vistaara 2.0, the company plans to double the outlet coverage and triple the village coverage. There are still various profitability levers (Raymond Consumer Care, Indonesia, and rest of world) available for Godrej Consumer Products to further improve its margin metric.
We raise our earnings per share by 1%/3% for FY25/FY26. We reiterate our Buy rating with a target price of Rs 1,550 (based on 55 times FY26E EPS).
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