Godrej Consumer Products: Healthy core business prospects; Investing on future growth drivers – Reiterate Buy

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Godrej Consumer Products: Healthy core business prospects; Investing on future growth drivers – Reiterate Buy

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Godrej Consumer Products

Healthy core business prospects; Investing

on future growth drivers – Reiterate Buy

Reiterate Rating: BUY | PO: 1,210 INR | Price: 1,030 INR

Stock pullback overdone; Relative growth/valn attractive 13 May 2026

Following a healthy, in-line 4QFY26 print (see our note after the quarterly trading Equity

update), GCPL hosted its annual analyst meet outlining the longer-term growth levers

and discussed their possible compounding effect on overall performance. We think the

Key Changesstrategy remains broadly unchanged – category development, supported by operational

simplification. What stood out this time is a sharper focus on portfolio diversification, (Rs) Previous Current

and perhaps more so organically (air fresheners, incense sticks, laundry liquids, etc.). This Price Obj. 1,225 1,210

will be key for the company to achieve double‑digit underlying volume growth (UVG) 2027E Rev (m) 172,330 169,059

medium-term (see our note on this theme). However, the market seems overly focused 2028E Rev (m) 186,119 183,256

on near-term guidance, particularly double-digit EBITDA growth in FY27E. We do not 2029E Rev (m) NA 199,203

view this as a negative surprise, given the volatility in commodity prices/operating 2027E EPS 23.2 22.7

environment of late. Clearly short-term EBITDA will also be weighed down by the 2028E EPS 27.1 26.3

investments on portfolio diversification, which fundamentally make sense. Separately, 2029E EPS NA 29.0

overhead/A&P optimization (~Rs4bn savings in FY26) can provide earnings support.

Aditya Mathur >>

We make minor estimate changes (±1-3%) factoring in the recent trends and business Research Analyst

outlook.