1. GCPL third-largest FMCG company by market cap, beats Nestle India

GCPL third-largest FMCG company by market cap, beats Nestle India

Investors preferred to book profits and waited for the next trigger post French presidential elections, say brokers

By: | Published: May 10, 2017 5:00 AM
The big jump in GCPL’s y-o-y net profit growth can be attributed to the fact that the company had incurred an exceptional loss of Rs 189 crore in the same quarter last year. (Reuters)

Shares of Godrej Consumer Products (GCPL) hit a fresh life-time high on Tuesday to dislodge Nestle India from the No.3 position of top Indian FMCG companies in terms of market capitalisation, after ITC and HUL. At Tuesday’s close, GCPL’s market capitalisation stood at Rs 65,710 crore, about Rs 1,000 crore more than that of Nestle India. Its shares gained as much as 9.7% after reporting a three-fold (y-o-y) jump in its March quarter net profit to Rs 389.9 crore on the back of a 13% (y-o-y) jump in revenue to Rs 2,489.49 crore.

The big jump in GCPL’s y-o-y net profit growth can be attributed to the fact that the company had incurred an exceptional loss of Rs 189 crore in the same quarter last year. What boosted investor sentiments further was the declaration of a 1:1 bonus. The India business sales grew 10% y-o-y in the fourth quarter. International business sales grew 22% y-o-y on a constant currency basis, company said in a post-earnings call. In the last six months, shares of the personal care producer gained 30% compared to a 9.8% gain for the Sensex.

The company also handed over its baton to Nisaba Godrej, currently the executive director, as its executive chairperson. Adi Godrej will assume the position of chairman emeritus.

Nearly half of the analysts who track the stock on Bloomberg have a “buy” recommendation on the stock against equal “sell” recommendation for the Nestle India stock. While 39% of analysts suggest to “hold” the GCPL stock, only 20.5% recommends to “hold” Nestle India stock. Over 22 lakh shares of GCPL were traded on BSE and NSE, which is eleven times higher than the three month average volume at the counters.

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