Godrej Consumer Products in focus: FMCG company Godrej Consumer Products (GCPL) is strategically addressing portfolio gaps and showcasing steady growth across its various business verticals, analysts at Motilal Oswal said in a note.

The company is witnessing improvements driven by expansion efforts in home insecticides and the introduction of liquid detergents for the mass market, along with the recent acquisition of Raymond Consumer Care Limited (RCCL).

Image Credits: Unsplash 

With a sequential increase in volume and favourable demand trends, GCPL is set to sustain its growth momentum, brokerage firm Motilal Oswal said in a note.

In Indonesia, GCPL is capitalising on the recovering consumer index and low market penetration of its Goodknight liquid vaporiser, presenting a crucial growth opportunity.

Despite healthy earnings before interest, taxes, depreciation and amortisation (EBITDA) margin recovery in the first nine months of financial year 2024 (9MFY24), there remains ample room for further margin enhancement, with the company aiming for a 200 basis points improvement by financial year 2024-2026 (FY24-26).

Furthermore, GCPL has divested its stake in East Africa, focusing on high-potential business areas to achieve over 15 per cent EBITDA margin in the next two years.

Under the leadership of Sudhir Sitapati, GCPL has undergone a strategic shift towards growth-centric initiatives, including inorganic growth, product innovation, and optimising operational efficiency.

Image Credits: Unsplash

Considering these developments and GCPL's proactive approach amid delayed demand recovery, the company's internal initiatives are expected to outperform its competitors.

With the domestic business already showcasing strong volume growth and opportunities for margin expansion in Indonesia and Godrej Africa, US, and Middle East (GAUM), Motilal Oswal analysts reaffirm a ‘buy’ rating with a target price of Rs 1,500.

As of 11:39 am, shares of GCPL were trading 1.33 per cent higher at Rs 1,273.60 per share.