Godrej Consumer Products Core remains strong… forex impacts :Emkay

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Godrej Consumer Products

Core remains strong… forex impacts

ACCUMULATE

CMP: Rs 404                                       Target Price: Rs 446

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n     Godrej Consumer’s (GCPL) consolidated revenue grew 24% yoy to Rs 12 bn, in line with our estimates.  However, forex loss restricted APAT growth to 4%, below our estimates

n     Domestic growth remained strong at 24% yoy – HI at 29% and soaps at 32%. Continued input costs pressure resulted in standalone EBITDA margin contraction of 220bps

n     International revenue growth of 24% yoy - Megasari at 24% and South-Africa at 48%. Favourable sales mix with prudent cost management resulted in 200bps margin expansion

n     Downward revise our FY12E EPS by 8% to Rs 17.8 and FY13E EPS by 6% to Rs 22.3 – Maintain ACCUMULATE rating on the stock with revised target price of Rs 446/share