Godrej Consumer shares rise 6% as brokerages cheer Q2 show

The company reported a 13 percent rise in net profit at Rs 491 crore for the September 30, 2024 quarter.

Shares of Godrej Consumer Products Limited surged 6 percent to Rs 1,329 in morning trade on October 25 as a host of brokerages issued bullish calls on the counter following the FMCG major’s second quarter earnings.

The company reported a 13 percent rise in net profit at Rs 491 crore for the September 30, 2024 quarter. It reported a net profit of Rs 433 crore for the year-ago period. The company’s revenue from operations rose 2 percent to Rs 3,666 crore in Q2FY25 as compared to Rs 3,602 crore in Q2FY24.

Goldman Sachs has maintained a ‘buy’ rating on Godrej Consumer, while slightly cutting the target price to Rs 1,500 from Rs 1,525. The brokerage noted that the company continues to deliver industry-beating volume growth in Q2. Positive developments are emerging in the Household Insecticides (HI) business following the launch of a new molecule, and Godrej remains confident in its soap business despite changes in formulation. However, the India EBITDA margin is expected to remain under pressure for the next two quarters due to palm oil inflation. Meanwhile, the international business is on a strong growth trajectory.

Nuvama has issued a ‘buy’ call on Godrej Consumer with a target price of Rs 1,600. The brokerage highlighted that incense sticks continue to perform well, gaining market share from illegal players. Household Insecticides saw healthy mid-teens volume growth on a two-year CAGR basis, while Air Fresheners and Fabric Care posted strong double-digit volume growth. Within the personal wash segment, Magic Handwash maintained strong double-digit volume growth, expanding its market share. Hair colours also saw double-digit volume growth, with shampoo hair colour showing particularly strong expansion.

HDFC Securities has also given a ‘buy’ rating on Godrej Consumer, setting a target price of Rs 1,450. HDFC Securities is confident in achieving strong earnings growth in the high teens, driven by two key factors. First, the company’s expanding market presence in India and Indonesia, which together account for 70 percent of consolidated sales. These markets are expected to deliver high single-digit volume growth, supported by innovations in existing categories like Household Insecticides, and expansion into newer segments such as air care and hair care.

At about 9:20 am, shares of the company were trading at Rs 1,289, higher by 3 percent from the last close on the NSE. Godrej Consumer shares have tanked 15 percent in the last three months.

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