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India's Godrej Consumer Products reported a smaller-than-expected rise in first-quarter profit on Wednesday, as its household insecticides saw soft demand.

The Cinthol soap maker reported a consolidated net profit of 4.51 billion rupees ($54 million) for the quarter ended June 30, up from 3.19 billion rupees a year earlier.

Analysts had on average expected a profit of 4.92 billion rupees, as per LSEG data.

Sale of products fell 3% to 33.11 billion rupees.

The company announced its entry into the pet care business, in which it will invest 5 billion rupees over 5 years.

For further earnings highlights, click(full story)

KEY CONTEXT

Branded consumer goods makers have reduced prices to compete with smaller rivals that offer cheaper alternatives, which has negatively impacted top-line growth.

However, they are reaping the benefits from a recovery in demand in rural areas.

Rival Saffola oil maker Marico reported a slightly bigger-than-expected increase in first-quarter profit, while Dabur India reported a first-quarter profit in line with expectations.

PEER COMPARISON

Valuation (next 12 Estimates (next 12 Analysts' sentiment

months) months)

RIC PE EV/EBITDA Revenue Profit Mean # of Stock to Div

growth growth rating* analyst price yield

s target** (%)

Godrej Consumer 59.31 41.47 8.75 22.24 Buy 33 1.04 1.01

Products

Marico 47.15 34.08 10.11 11.87 Buy 37 0.91 1.51

Britannia Industries 55.81 38.65 9.46 13.16 Buy 34 1.01 1.26

Dabur India 50.65 38.77 9.46 13.33 Buy 39 0.95 0.87

* Mean of analysts' ratings standardised to a scale of Strong Buy, Buy, Hold, Sell, and Strong Sell

** Ratio of the stock's last close to analysts' mean price target; a ratio above 1 means the stock is trading above the PT

APRIL-JUNE STOCK PERFORMANCE

-- All data from LSEG

-- $1 = 83.9250 Indian rupees