Q1 Results: Godrej Consumer’s Profit Beats Estimate, Announces Bonus Issue 

Godrej Consumer Products Ltd.’s profit rose the most in five quarters during April-June, beating analysts estimates, on the back of a deferred tax gain.

The ‘Cinthol’ soap maker reported an 80 percent jump in net profit at Rs 405 crore for the three-month period, according to the FMCG major’s exchange filing today. Analysts tracked by Bloomberg had projected the profit at Rs 295 crore.

Revenues rose 13.7 percent to Rs 2,476 crore, marginally higher than the Bloomberg consensus estimate of Rs 2,413 crore.

The Adi-Godrej group company’s operational earnings rose 28.7 percent to Rs 449 crore, beating the Bloomberg consensus of Rs 426 crore. The company’s margin expanded 210 basis points from last year to reach 18.1 percent during the reported period.

GCPL’s sales were driven by Rs 445-crore sales from its insecticide Goodknight this quarter. The company attributed this growth to a better season and new product launches.

The board has approved the issue of one equity share for every 2 shares held.

Shares of GCPL ended the day up 0.28 percent at Rs 1,312 on the BSE.

Here’s what brokerages take on Godrej Consumer’s June quarter performance:

Macquarie

• Maintained ‘Outperform’; raised price target to Rs 1,465 from Rs 1,285.
• Strong turnaround in HI business leading to operational beat in June quarter.
• India volume growth at 14 percent was ahead of estimate.
• Believe growth momentum in HI business will continue.
• Godrej Consumer remains our top pick.

CLSA

• Maintained ‘Outperform’; raised price target to Rs 1,425 from Rs 1,150.
• June quarter’s consolidated Ebitda was ahead of estimates.
• Strong domestic growth with healthy margins.
• Management commentary was fairly positive on growth.
• 2018-19 could be busiest year (new launches) for India business