Godrej Consumer Q1 Review - Stable Show In India, Indonesia; GAUM Profitability Improves: ICICI Securities

ICICI Securities Report

Godrej Consumer Products Ltd.'s Q1 FY25 performance was largely in line with our estimates and guidance in analyst meet with a focus on high-single digit volume growth in India (+8% YoY) and Indonesia (+7% YoY) with improving profitability in Godrej Africa, US, and Middle East  to mid-teens (14.4%) while revenue in GAUM was impacted by multiple reasons (currency, restructuring, trade inventory corrections etc.).

Within India, it had strong performance in fast-growing categories while legacy portfolio of soaps, household insecticide and hair colour had a subdued quarter.

Raymond Consumer Care Ltd. business maintained its quarterly revenue run rate of ~Rs 1.5 billion and is on track to deliver double-digit revenue growth in FY25 while it is likely to miss on profitability guidance (~15-20% lower).

We like the continued focus on innovation with launch of new LV with ~two times efficacious molecule likely to drive market share gains; announced entry into pet care space by late FY26. At 59 times [implied] P/E FY26E and after 46% stock returns over last one year, we downgrade to Add (from Buy) with unchanged target price of Rs 1,650.

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