Buy Godrej Consumer Products Ltd for the Target Rs 1,250 by Emkay Global Financial Services Ltd
We recently met GCPL management, which highlighted the following key priorities:
1) hiring an India CEO and a Global CFO over the next few months
2) accelerating growth in the India business; and the management expressed confidence in achieving its guidance of double-digit consolidated revenue and EBITDA growth in FY27. GCPL’s operating performance has outpaced peers in recent quarters, with high-single-digit volume growth (partly aided by a benign base), driven by its speedboats (liquid detergent, air care, and incense sticks). The management aims to significantly step up execution and aspires to achieve double-digit volume growth, which is encouraging. Despite the recent unexpected management changes creating near-term uncertainties, we believe GCPL is well positioned to deliver double-digit earnings growth over the medium term (ahead of most peers). We do not change our estimates but lower our multiple by 10% to factor in the added uncertainties from the management changes. We reiterate BUY while lowering our TP by ~7% to Rs1,250 from Rs1,350 (43x Sep-28E EPS), as we believe the stock offers a favorable riskreward, especially after the recent sharp correction.
Sharper focus on execution
GCPL’s India business growth has been led by three speedboats (Fab liquid detergent, air care, and incense sticks), while the core portfolio (soaps and household insecticide liquid vaporizer) has lagged. With the hiring of a separate India CEO (a role eliminated after Sunil Kataria’s exit in 2022 and assumed by then CEO Sudhir Sitapati), the management expects execution to improve, leading to acceleration in growth. The company expects the new India CEO to be onboard before the end of FY27
International growth to remain strong
The international portfolio is increasingly shifting toward profitable and more sustainable growth, led by the turnaround in GAUM under Aasif Malbari, the current CEO and previously Business Head, GAUM, and Global CFO. The company intends to replicate the successful execution seen in GAUM in its India business. Indonesia has also performed well in recent quarters (partly due to a benign base), supported by improving operating conditions and growth in its household insecticides and air care portfolios.
Favorable risk-reward, reiterate BUY
GCPL’s stock has corrected sharply since the resignation of its former CEO (down ~11% since 11-Aug-2026 vs -1% for the Nifty 50 index). Despite recent developments, the growth outlook remains strong and we expect sales/earnings CAGR of 12%/16% over the next three years (ahead of most peers). The stock is currently trading at 39x 1Y forward PER, well below its 5Y average, making the risk-reward favorable, in our view. We reiterate BUY with a lower TP of Rs1,250 (from Rs1,350). However, the pending appointment of the India CEO is likely to remain an overhang in the near term.
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