Godrej Consumer Products share price zoomed 25 per cent to a fresh 52-week high of Rs 894 apiece intraday on BSE, a day after the company posted a 59 per cent on-year rise in consolidated net profit to Rs 365.84 crore in the fourth quarter of FY21. The company also informed that Sudhir Sitapati will join the company as managing director and chief executive officer effective October 18. Nisaba Godrej, currently the chairperson and managing director, will continue to serve as executive chairperson. Godrej Consumer Products stock has surpassed its previous 52-week high of Rs 808 apiece touched on January 21, 2021. It had touched an all-time high of 1,964. apiece on BSE on June 21, 2017.
So far in the session today, 6.84 lakh Godrej Consumer Products shares have traded on BSE, while a total of 1.66 crore stocks have exchanged hands on NSE. Analysts at Motilal Oswal Financial Services have upgraded Godrej Consumer Products stock to ‘buy’. Sitapati’s appointment as MD and CEO for five years as well as his relative young age (mid-40s), gives him adequate time to formulate and implement strategic changes. “The underpenetrated Household Insecticides (70%/50% penetration in urban/rural) and Hair Color (30% penetration) categories could greatly benefit from Sitapati’s past experience, where GCPL has struggled to boost penetration,” it added.
Those at ICICI Securities have also upgraded Godrej Consumer Products to ‘buy’ from ‘add’. The brokerage firm said that India’s growth was driven by soaps (gaining market shares in an inflationary environment) and HI (broad-based across formats) while Hair Colour continued recovery (with category uptick). “The appointment of Sudhir Sitapati (ex-HUL) as MD & CEO (effective 18th Oct’21) is likely a re-rating event,” they said.
Godrej Consumer Products Ltd’s total expenses came in at Rs 2,259.12 crore, up 26.07 per cent in the January-March 2021 quarter as against Rs 1,791.93 crore a year ago. It’s India revenue was up 34.63 per cent to Rs 1,499.74 crore in the quarter under review as against Rs 1,113.94 crore a year ago. India sales increased 35 per cent on-year to Rs 1,466 crore, while the EBITDA (earnings before interest, tax, depreciation and amortisation) increased 10 per cent on-year to Rs 331 crore.
Nisaba Godrej said Godrej Consumer Products will continue to focus our efforts where the demand is – in ‘household insecticides’, ‘hygiene’, and ‘value for money’. Under Sitapati leadership, HUL built up its foods and refreshments business as one of the largest in India, which included the $5 billion merger and integration of GlaxoSmithKline Consumer Healthcare with HUL, the largest deal of its kind in the FMCG sector in India.
Eqwires Research Analyst
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