BQ Blue’s special research section collates quality and in-depth equity and economy research reports from across India’s top brokerages, asset managers and research agencies. These reports offer BloombergQuint’s subscribers an opportunity to expand their understanding of companies, sectors and the economy.
Motilal Oswal Report
Godrej Consumer Products Ltd.’s Q2 FY22 result was in-line with our expectations.
While rising material costs could lead to a sequential Ebitda margin contraction in Q3, the management is positive of a more normalised margin by Q4 FY22, given the forthcoming price increases.
The investment case as highlighted in our upgrade note in May 2021 and a detailed note in June 2021 is intact.
The positive trend on double-digit domestic sales that was restarted in FY21 (after a lackluster second half in the previous decade) has continued in H1 FY22.
Godrej Consumers' good work on the balance sheet front in recent years also continued in H1 FY22, with return on capital employed crossing 20%.
The Africa business recovery, albeit at an early stage (only 1.5 years into its five-year plan), is also encouraging.
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