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MOSL: GODREJ CONSUMER (Buy)-In line result; continuation in sales momentum encouraging

GODREJ CONSUMER: In line result; continuation in sales momentum encouraging

(GCPL IN, Mkt Cap USD13.5b, CMP INR976, TP INR1140, 17% Upside, Buy)

 

• GCPL’s 1QFY22 sales were in line with our estimates, while EBITDA margin was slightly better than expected, despite higher than anticipated gross margin pressures due to a lag between commodity cost increases and price hikes taken by the company.
• Continued double-digit two-year CAGR in the key domestic segments of Household Insecticides (HI) and Soaps, as well as improving performance in Africa were particularly encouraging highlights.
• We maintain our Buy rating as pieces of the growth puzzle that were missing earlier are gradually falling into place as highlighted in our in Jun’21 as well as our .

 

Result broadly in line; slight beat on EBITDA margin

Consolidated performance

• Consolidated net sales grew 24.4% YoY to INR28.9b (in line) in 1QFY22. EBITDA grew 29.3% YoY to INR6.1b (est. INR5.8b), PBT rose 36.8% to INR5.4b (est. INR5.2b), and adjusted PAT increased by 38.4% to INR4.2b (in line). Net profit, without exceptions and one-off items, grew 38% (as per the press release).
• Consolidated comparable constant currency sales grew 25% YoY in 1QFY22.
• Home Care/Personal Care grew 14%/29% YoY.