In the early trading session on Tuesday, Godrej Consumer Products’ stock surged by up to 8%, propelled by the company’s fourth-quarter performance surpassing analysts’ expectations. The shares of Godrej Consumer Products witnessed a substantial rise of 7.16%, reaching a 52-week high of Rs 1,346.70 apiece on NSE.
Despite this positive market response, the FMCG major reported a net loss of Rs 1,893 crore in Q4FY24, contrasting with a net profit of Rs 452 crore in the corresponding period last year.
This downturn was primarily attributed to a one-time exceptional loss of Rs 2,376 crore incurred during the March quarter, stemming from the reorganization of its Africa business. However, amidst this setback, the company’s revenue for Q4FY24 exhibited a notable growth of 6%, rising to Rs 3,385.61 crore from Rs 3,200.16 crore in the previous year.
Moreover, the consolidated volume for the quarter ending March 2024 witnessed a robust increase of 12%, driven by a 15% growth in the India business volume and a 12% growth in the Indonesia volume.
Brokerages on Godrej Consumer Products
JP Morgan on Godrej Consumer Products
JP Morgan has maintained an overweight rating on Godrej Consumer Products with a target price of Rs 1300. According to the JP Morgan report, the Q4 India volume growth continues to stand out, remaining best in-class.
Additionally, overseas margins have performed better than expected, with Indonesia demonstrating solid revenue margin delivery partly due to a shift in seasons.
The report highlights that comments on demand and margin outlook, along with updates on key strategic initiatives such as new product launches, will be crucial to watch out for.
Jefferies Godrej Consumer Products
According to a recent report by Jefferies, the firm has maintained a Buy rating on Godrej Consumer Products, setting a target price of Rs 1,520.
The report highlights that the company’s Q4 earnings surpassed estimates, with an impressive 18% Like-for-Like (LFL) EBITDA growth. Key positives identified include industry-leading volume growth, robust traction in Indonesia, and strong EBITDA delivery.
However, the report notes that weak Household Insecticides (HI) sales acted as a dampener due to an extended winter period. Nevertheless, Jefferies anticipates that further initiatives, such as the launch of new products, particularly in the Household Insecticides segment, should provide support moving forward.
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