Godrej Consumer Products Ltd (GCPL) is one of the leading FMCG companies in India, with a portfolio of well-known brands such as Godrej No.1, Good Day, Cinthol, Glade, and Balsun. The company has been delivering strong volume growth and margin improvement in the past few quarters, driven by its focus on market-beating categories and innovation.
Recently, GCPL received a positive rating upgrade from ICICI Securities, which is upbeat about the company’s prospects in Indonesia and other emerging markets. ICICI Securities has raised its target price for GCPL from Rs 1,050 to Rs 1,260 per share, implying an upside of 12% from the current market price of Rs 1,074.25. The brokerage has also maintained its ‘buy’ rating on the stock.
According to ICICI Securities, GCPL’s volume growth is likely to remain robust in FY24 due to its strong distribution network and product mix. The company has also been investing in new categories such as hair care and personal care to capture the growing demand for premium products. Moreover, GCPL’s margins are expected to improve further due to cost rationalization and operational efficiency.
One of the key catalysts for GCPL’s growth is its expansion into Indonesia, which is one of the fastest-growing FMCG markets in Asia. GCPL has entered into a joint venture with PT Unilever Indonesia (Persero) Tbk to manufacture and distribute its products in Indonesia. The joint venture will leverage Unilever’s expertise and scale in the Indonesian market and help GCPL tap into a large and untapped consumer base.
ICICI Securities believes that GCPL’s entry into Indonesia will boost its revenue growth by 15-20% in FY24 and create long-term value for shareholders. The brokerage also expects GCPL to benefit from its strong brand equity and innovation capabilities in other emerging markets such as Africa and Latin America.
Therefore, ICICI Securities recommends buying GCPL shares at current levels with a target price of Rs 1,260 per share. This implies an upside potential of 12% from the current market price of Rs 1,074.25. GCPL is a buy now, not later opportunity for investors who are looking for exposure to one of India’s leading FMCG companies with strong growth prospects across geographies.
