Goldman Sachs has a Buy rating on the stock with a target price of Rs 1,100 per share
After Marico, FMCG firm Godrej Consumer Products came out with a disappointing quarterly update which dragged the stock down by 5 percent on October 6. The company said that it expects mid-single-digit volume drop, with a low single-digit 3-year volume CAGR, as the FMCG industry continued to remain soft during the quarter.
At 11:10am the stock was trading at Rs 850.20 apiece on the BSE, down 5.14 percent, while the benchmark Sensex was at 58,508.33, up 442.86 points or 0.76 percent.
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In India, the company expects to deliver high single-digit sales growth. “Meanwhile in Indonesia, with hygiene performance waning after COVID-19 and a large hygiene comparator in the base, we expect early double-digit constant currency sales decline. We expect close to high single-digit sales growth (excluding hygiene),” the company said in a stock exchange filing.
Godrej Consumer’s growth momentum across key countries Africa, USA, and Middle East (GAUM) continued. “We expect to deliver constant currency sales growth in the low-teens,” it added.
On the profitability front, the company is anticipating a mid-teen decline in EBITDA due to consumption of high cost materials, significant upfront marketing investments to drive category development and a weak performance in Indonesia.
However, Goldman Sachs has a Buy call on the stock with a target price of Rs 1,100 per share. “We see the company as a strong turnaround candidate. “India home care growth has improved and Indonesia is showing initial signs of recovery,” it said.
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