Godrej Consumer Products - Yet another extension in Africa! Emkay

Please Share:: India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��

Godrej Consumer Products

Yet another extension in Africa!

ACCUMULATE

CMP: Rs 411                                       Target Price: Rs 474

---

n     Godrej Consumer (GCPL) has acquired 51% stake in Darling Group, an African company with a 20% market share in sub Saharan African hair extensions market of USD 1 bn

n     Deal is structured in three phases where GCPL will acquire 45% of business in first phase, 25% in the second and 30% in third one- with a right to increase its stake to 100%

n     While the management maintained that it will add Rs 200 mn to FY12 earnings, our calculations indicate that accretion would be lower at Rs 120 mn, at 20% EBITDA margin

n     We raise our FY12/13 EPS by 2%/5% to Rs 19.3 and Rs 23.7, maintain our ACCUMULATE rating on the stock with a revised target price of Rs 474/share