Godrej Consumer - Outperformance Triggers Yet To Play Out: ICICI Securities

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..ICICI Securities Report.Godrej Consumer Products Ltd.'s stock price was broadly flat during July 2017 to May 11, 2021 (date of appointment of Mr. Sudhir Sitapati as the Managing Director and Chief Executive Officer) for a host of fundamental reasons (underwhelming performance in Africa, consensus' worries about household insecticides category growth, relatively (perceived) lower success rates in innovation, deceleration in Indonesia revenue growth, etc.) With the stock rallying 20% on the day following the appointment news, investors ask us whether valuations already capture the upsides. We believe the outperformance triggers are yet to play out in its entirety. While upside potential for the near-term earnings (read FY22) may be limited, we expect some of the potential positive developments to be rewarded generously (and rightly so, as being Discounted Cash Flow-accretive) by the street (re-rating). At 40 P/E FY23e, we find GCPL's valuations (relatively) palatable vs sector median (amongst large caps) at 46X and Tata Consumer Products Ltd. at 51X (a comparator with sizeable international business).Click on the attachment to read the full report:.DISCLAIMERThis report is authored by an external party. BloombergQuint does not vouch for the accuracy of its contents nor is responsible for them in any way. The contents of this section do not constitute investment advice. For that you must always consult an expert based on your individual needs. The views expressed in the report are that of the author entity and do not represent the views of BloombergQuint..Users have no license to copy, modify, or distribute the content without permission of the Original Owner.

Godrej Consumer - Outperformance Triggers Yet To Play Out: ICICI Securities

Godrej Consumer - Outperformance Triggers Yet To Play Out: ICICI Securities

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