• Business

    Broker’s call: Godrej Consumer (Buy)

    AnyFans Posted on

    By Ks Badri Narayanan

    Copyright thehindubusinessline

    Broker’s call: Godrej Consumer (Buy)

    Target: ₹1,430

    CMP: ₹1,162.70

    With the GST cut boosting soaps and men’s grooming range (about 35 per cent of its domestic range) and innovations (Godrej Fab, Godrej Ninja) scaling up well, Godrej Consumer Products is an attractive play on consumption recovery.

    We expect its international business to deliver high single-digit growth (Indonesia recovery, strong Africa, FTAs aiding Europe/UK), while its India volume growth should improve with the GST cut. Margin tailwinds from price increases (in soaps), premiumisation and cost efficiency measures should drive profit growth ahead of revenue, making it a compelling medium-term compounder.

    Management expects high single-digit India volume and double-digit revenue growth, with profit growth out-stripping revenue, backed by price increases (soaps), premiumisation and cost efficiencies. Palm oil prices have been volatile, but management hopes prices ahead would be moderate.

    For the year we factor in persistent higher inflation in palm oil, GST rate cuts and a slightly weaker Indonesian performance, and lower our FY26/FY27 EPS 8/4 per cent and introduce FY28. At the CMP, the stock trades at 55x/45x/39x FY26e/27e/28e EPS of ₹21.4/26.4/30.7.

    Key risks: Failed launches, pricey/unwarranted bolt-on acquisitions, geopolitical turbulence shrinking the international business.

    Published on September 26, 2025

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