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UBS Investment Research
Godrej Consumer Products
O perationally, a good quarter
Overall revenues +23%, domestic revenues +24%
Godrej Consumer Products’ (GCPL) Q2 FY12 consolidated revenues grew 23%
YoY led by strong growth in its domestic (+24%) and international operations
(+22%). Consolidated EBITDA was Rs2.15bn and EBITDA margins 18.1%, while
PAT (adjusted) was Rs1.27bn, a decline of 2.5% YoY. This was mainly due to
forex loss of Rs165m (Rs85m on account of net impact of import export
receivables and Rs80m on account of revaluation of inter-company loans) versus a
forex gain of Rs90.4m in Q2 FY11.
Strong domestic sales growth
Domestic revenues growth was very strong at 24% YoY led by soaps at +32%, hair
care +15%, and insecticides +29%. Home care contributed to ~46% of total sales
and soaps contributed to 35%. Gross margins in the domestic business improved
sequentially by 90bps due to the full impact of price increases flowing through.
International business has started firing
GCPL’s international business grew 22% YoY. Megasari (~55% of international
revenues) posted strong comparable sales growth of 27% YoY. GCPL’s Africa
business contributed to ~15% of international sales and grew 47% YoY.
Management has stated that the full benefits of the integration will be reflected in
Kinky’s margins from Q4 FY12. The LatAm business (~16% of international
business) grew 13% YoY.
Valuation: Buy rating and price target of Rs500
We have a Buy rating with a price target of Rs500 derived from our sum-of-theparts
analysis of each business.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
UBS Investment Research
Godrej Consumer Products
O perationally, a good quarter
Overall revenues +23%, domestic revenues +24%
Godrej Consumer Products’ (GCPL) Q2 FY12 consolidated revenues grew 23%
YoY led by strong growth in its domestic (+24%) and international operations
(+22%). Consolidated EBITDA was Rs2.15bn and EBITDA margins 18.1%, while
PAT (adjusted) was Rs1.27bn, a decline of 2.5% YoY. This was mainly due to
forex loss of Rs165m (Rs85m on account of net impact of import export
receivables and Rs80m on account of revaluation of inter-company loans) versus a
forex gain of Rs90.4m in Q2 FY11.
Strong domestic sales growth
Domestic revenues growth was very strong at 24% YoY led by soaps at +32%, hair
care +15%, and insecticides +29%. Home care contributed to ~46% of total sales
and soaps contributed to 35%. Gross margins in the domestic business improved
sequentially by 90bps due to the full impact of price increases flowing through.
International business has started firing
GCPL’s international business grew 22% YoY. Megasari (~55% of international
revenues) posted strong comparable sales growth of 27% YoY. GCPL’s Africa
business contributed to ~15% of international sales and grew 47% YoY.
Management has stated that the full benefits of the integration will be reflected in
Kinky’s margins from Q4 FY12. The LatAm business (~16% of international
business) grew 13% YoY.
Valuation: Buy rating and price target of Rs500
We have a Buy rating with a price target of Rs500 derived from our sum-of-theparts
analysis of each business.
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