Godrej Consumer Q3 Results Review - Beat On Ebitda; Focus On TAM Expansion: Motilal Oswal

Motilal Oswal Report

Godrej Consumer Products Ltd.’s consolidated net revenue grew 1.5% YoY to Rs 36.6 billion (estimated. Rs 36.3 billion), constant currency growth was at 19% YoY in Q3 FY24. The India business clocked 9% YoY revenue growth (2% organic) with a volume growth of 12% YoY (5% organic).

In India, the home care and personal care segments registered 5% and 2% YoY growth, respectively. Household insecticide volume growth was stable at low single digit.

Godrej Consumer Products launched the Goodknight Agarbatti with an exclusive new molecule (RNF), which is ~2 times more effective than most other molecules. The launch is to tap the Rs 12 billion incense stick market (growing at 10%) that is largely dominated by unorganized players.

The company is consistently working towards expanding total addressable market for the India business along with product innovation to drive frequency. Besides, there has been a consistent effort to fix the gaps in profitability/growth for its international business.

We reiterate our 'Buy' rating with a target price of Rs 1,350 (based on 55 times December- 25 earnings per share).

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