Godrej Consumer's Disruptive Forays Key To Growth, Says Nomura

Nomura remains bullish on Godrej Consumer Products Ltd., reiterating a 'buy' rating with a raised target price of Rs 1,485, implying a 14.2% upside. The brokerage sees GCPL's continued foray into future-facing and disruptive categories as key to its growth, with India volumes expected to grow in mid-to-high single digits and Ebitda in double digits for the current fiscal.

GCPL's annual analyst meet showcased multiple pivots, from democratising deodorants with a Rs 99 launch price for KS Spark (versus market at Rs 230), to entering antiperspirants under the new Godrej Block brand for men.

It also launched a new Eau de Parfum range in long-lasting small packs and entered the gifting space. Another new launch, Amazon Woods, a no-gas body spray with 12% fragrance priced at 3-4% below market, targets premiumisation.

In a significant diversification move, GCPL has ventured into pet care with products like pet shampoo under brand GCPL, and expanded its home care portfolio with launches such as 'Aer Plug' and aerosols at Rs 99. Nomura sees these launches as positioning GCPL as a serious contender in the air, hair, and household insecticide segments.

For fiscal 2026, Nomura expects India volume growth in mid-to-high single digits and consolidated Ebitda growth in double digits, even amid pressures like high palm oil prices. Despite a slight cut in the Ebitda for fiscals 2026 and 2027 by 2-4% due to margin pressures, GCPL's growth profile remains strong, the brokerage said.

Valuations remain rich with the stock trading at 51 times the earnings per share value for March 2027, but Nomura maintains its call citing GCPL's continued investments in brand innovation and premiumisation. The brokerage applied a 40 times enterprise value to Ebitda ratio multiple to arrive at its revised target, while flagging slow volume growth as a key risk.