Note on Godrej Consumer Products Ltd and Maruti Suzuki Ltd Q2FY26E Result by Asit C. Mehta Investment Interrmediates Ltd
Godrej Consumer Products Ltd
* We expect a 4% growth for GCPL’s India business, 2.0% decline in Indonesia and 15.0% growth in GAUM. This leads to a consolidated revenue estimate of Rs 38,599 mn, a growth of 5.3% YoY/ 5.4% QoQ. This is a slowdown from nearly double-digit YoY growth seen in Q1FY25, as Q2 was impacted by the GST rate transition.
* As indicated by the company, consolidated EBITDA will see a decline due to the transitory impact of change in GST rates. We expect EBITDA to be at Rs 7,053 mn, a decline of 7.4% YoY, with EBITDA margin contraction of 250 bps YoY to 18.3%.
* ?We expect Net Profit of Rs 4,734 mn, a decline of 3.6% YoY. (+4.6% QoQ).
The stock is currently trading at 51.4/41.7/37.1x FY26E/27E/28E EPS. We have a BUY rating on the stock with a target price of Rs 1,450 based on 51x PE assigned to 4-quarter ending Sep-27E EPS of Rs. 28.5. We will review our price target and rating post the results and conference call.
Maruti Suzuki Ltd
* Maruti Suzuki reported a 1.7% YoY growth in wholesale volumes for the quarter (+4.4% QoQ) to 5,50,874 units.
* We expect ASPs to moderate sequentially (+3.0% YoY/-2.4% QoQ) due to higher discounts and improvement in share of compact vehicles, offset by higher export share.
* We expect revenue growth of 4.8% YoY to Rs 3,90,031 mn.
* We expect EBITDA margin to be under pressure in the quarter and contract by 163 bps YoY to 10.2%, impacted by higher discounts and expenses related to model launches. Absolute EBITDA is expected to decline by 9.6% YoY to Rs 39,935 mn.
* Net Profit has the benefit of a lower base, due to one-off tax provision expense in Q2FY25. As a result, despite lower operating performance, PAT is expected to grow by 6.6% YoY to Rs 32,714 mn.
The stock is currently trading at 29.4/26.2/23.5x FY26E/27E/28E EPS. We have a HOLD rating on the stock with a target price of Rs 16,180 based on 27x its Sep-27E EPS of Rs 599. We will review our price target and rating post the results and conference call.
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