Mumbai-based Fast-Moving Consumer Goods (FMCG) major, Godrej Consumer Products (GODREJCP), has reported robust financial results for the July-September quarter, sparking a surge in its share prices. The company, known for popular brands like Cinthol, Good Knight, and Ezee, delivered an impressive performance, driven by a 10 percent year-on-year growth in volumes.
On Thursday, the shares of Godrej Consumer Products climbed by Rs 32.4, or 3.3 percent, reaching Rs 1,007 apiece on the Bombay Stock Exchange (BSE). This pushed the company’s stock price within Rs 95 of the 52-week high it achieved in July.
Following the close of the market on Wednesday, Godrej Consumer Products released its financial results, which exceeded analysts’ expectations. The company reported a 20.6 percent year-on-year increase in consolidated net profit, reaching Rs 432.8 crore, accompanied by a 6.2 percent growth in revenue, totaling Rs 3,602 crore for the second quarter of the current financial year.
Furthermore, the company’s earnings before interest, taxes, depreciation, and amortisation (EBITDA) witnessed a substantial 29.9 percent increase, amounting to Rs 704 crore. This performance improvement led to a 350 basis points (bps) enhancement in margin, reaching 19.5 percent, surpassing market forecasts.
The company disclosed that its consolidated sales recorded a remarkable 16 percent year-on-year growth in constant currency terms. Within its India business segment, sales expanded by 9 percent, with volumes showing a substantial 11 percent increase.
Moreover, Godrej Consumer Products’ board declared a dividend of Rs 5 per share with a record date set for November 9.
Commenting on the results, Anil Singhvi, Managing Editor of Zee Business, emphasised that Godrej Consumer Products had delivered the best results in the FMCG sector, showcasing strong margins. He recommended buying the company’s futures, with target prices of Rs 988, Rs 999, and Rs 1,010, while setting a stop loss at Rs 962. He also highlighted the company’s management’s confidence in future growth.
Most brokerage firms expressed positive views on Godrej Consumer Products following the earnings announcement. HSBC maintained its ‘buy’ recommendation for the company but reduced the price target for its stock by Rs 30 to Rs 1,220. HSBC noted that while the company’s standalone volume growth remained robust, there was a slight decline in personal care.
Godrej Consumer Products has been on a positive trajectory, and its latest financial results indicate strong growth potential. The company’s ability to beat market expectations and its focus on driving volume-led growth are contributing to its success in the highly competitive FMCG sector. With a track record of consistent performance, the company seems well-positioned to continue its growth in the coming quarters.
