IGI Logo

FY27 on track for double-digit growth; India remains strong

* At the Godrej Consumer (GCPL) Investor Meet 2026, the company shared its strategic focus on category development, continued portfolio transformation, and simplification of business operations. The Indian business is expected to achieve high single-digit UVG in FY27. The company’s high-growth portfolio, called speedboats, has reached 15% of the mix compared to 8% in FY24 (clocked 30% CAGR). Management expects this portfolio to sustain over 30% volume growth and reach 40% of the mix by FY30. The company’s initiatives are expected to support healthy double-digit revenue CAGR for the Indian business over FY26- FY30. In addition, the mothership portfolio (core) is still under-indexed in India, offering a significant growth opportunity through expansion into new markets and formats. On the international front, the overall progression is inspiring. After a muted FY26, Indonesia is expected to deliver high single-digit revenue growth, along with double-digit EBITDA growth, in FY27. In LATAM, EBITDA margin expanded sharply from -2.5% in FY23 to 7% in FY26, with management targeting high-teen margins over the medium term. Africa also delivered a strong FY26 performance, with revenue growing 23% YoY (13% in CC terms) and EBITDA margin reaching 14.4%, reflecting a structural improvement from below 10% over FY19-FY24.

* The company has guided for double-digit consolidated revenue and EBITDA growth in FY27. We model a 12%/14% revenue and EBITDA CAGR over FY26-28E. Given the under-indexed core portfolio and high-growth speedboat portfolio, we remain constructive on GCPL and reiterate our BUY rating with a TP of INR1,300 (based on 45x Mar’28E EPS).

Double-digit EBITDA growth in FY27

GCPL delivered FY26 consolidated revenue growth broadly in line with its highsingle-digit guidance, with standalone UVG in the mid-to-high single digits. However, consolidated EBITDA growth fell short of guidance owing to weak soaps performance (steep palm derivative inflation through 1HFY26), muted Indonesia volumes, and Argentina profitability pressures. Margin recovery improved meaningfully in 2HFY26, supported by media savings and easing input costs. The company has guided for high single-digit standalone UVG, doubledigit consolidated revenue, and EBITDA growth in FY27.

Fast-growing portfolio becoming profit accretive

GCPL's India portfolio is structured around a mothership model (Household Insecticides, Skin Cleansing, Hair Colour), supported by speedboats (Godrej Fab, Aer Air Fresheners, Goodknight Agarbatti, Godrej Spic, Muuchstac, among others). Speedboats now contribute ~15% of India’s standalone sales (FY26), up from 8% in FY24, and are targeted to reach ~40% by FY30. Management has guided for each speedboat to add ~100bp of delta growth annually, cumulatively contributing ~500bp incremental growth to India by FY30. The economics of the speedboat portfolio also appear compelling: following modest profitability in initial years, topline growth is expected to accelerate to over 40% by year three, while bottom-line growth could scale to over 60%, supported by moderating A&P intensity and the benefits of operating leverage.

Reiterate BUY

Management remains committed to improving volumes for the Indian business and optimizing efficiencies across the value chain. Going forward, the GAUM business is expected to deliver improved profitability growth. Indonesia's recovery is anticipated to start meaningfully from FY27, as market conditions normalize. The company is expanding its TAM by foraying into new, faster-growing categories, such as men’s facewash and toilet cleaners, and continues to strengthen its core portfolio. We model 12%/14% revenue and EBITDA CAGR for FY26-28E. Given the growth-centric focus, we remain constructive on GCPL and reiterate our BUY rating with a TP of INR1,300 (based on 45x Mar’28E EPS).

For More Motilal Oswal Securities Ltd Disclaimer
http://www.motilaloswal.com/MOSLdisclaimer/disclaimer.html
SEBI Registration number is INH000000412