Brokerage firm Goldman Sachs on Tuesday, March 18, projected a 30% upside on shares of Godrej Consumer Products Ltd. (GCPL) compared to its previous closing price and said the company is poised to be the fastest growing FMCG firm under its coverage in financial year 2026.The brokerage maintained its “buy” rating on the stock with a price target of ₹1,370 per share. The stock ended the previous trade session at ₹1,052.3 apiece.
Goldman Sachs said the company’s third quarter was an aberration in an otherwise strong volume growth trajectory.
It said that GCPL’s household insecticides business is on the path of structural market share-led growth as its new formulations have started to gain traction six months after their launch.
The brokerage expects the company’s margin to recover as the soap pricing gradually passes on palm oil inflation. In December 2024, GCPL MD and CEO Sudhir Sitapati had told CNBC-TV18 that he expected continued challenges in the company’s soaps business over the next few months, driven by a significant rise in raw material costs, particularly palm oil. However, he expects things to improve in the January-March 2025 (Q4FY25) quarter.Goldman Sachs also added that the company’s risk reward is extremely favourable post the recent correction in share price.
Goldman Sachs said the company’s third quarter was an aberration in an otherwise strong volume growth trajectory.
It said that GCPL’s household insecticides business is on the path of structural market share-led growth as its new formulations have started to gain traction six months after their launch.
The brokerage expects the company’s margin to recover as the soap pricing gradually passes on palm oil inflation. In December 2024, GCPL MD and CEO Sudhir Sitapati had told CNBC-TV18 that he expected continued challenges in the company’s soaps business over the next few months, driven by a significant rise in raw material costs, particularly palm oil. However, he expects things to improve in the January-March 2025 (Q4FY25) quarter.Goldman Sachs also added that the company’s risk reward is extremely favourable post the recent correction in share price.
The company’s December quarter net profit declined 14.3% to ₹498.3 crore from the previous year’s ₹581.1 crore. Its revenue gained 3% to ₹3,768.4 crore from the last year’s ₹3,659.6 crore. The company’s EBITDA declined 10.1% to ₹755.9 crore against ₹840.7 in the year-ago period. Its margin contracted to 20.1% from the previous year’s 23%.
Shares of GCPL ended 3% higher at ₹1,084. The stock is down 30% from its peak.
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