Over the long term, the company aims to deliver double-digit volume growth, along with revenue and profit growth in the teens.
The company is focusing on portfolio transformation by entering new-age categories and capturing white spaces beyond Home Care. It has also created the Godrej Lab, or G-Lab, to identify emerging consumer trends and develop and launch premium products with greater speed and efficiency.
GCPL is also looking to transform itself into a new-age FMCG company, with artificial intelligence being integrated into areas such as demand forecasting, media planning and pricing models.
The company said it will continue to focus on its core categories, including Household Insecticides and Soaps, which have previously lagged expectations. The focus will be on bringing back the innovation pipeline and strengthening execution, both at the operational level and in translating strategy into action.
What brokerages say
Nomura has a ‘Buy’ rating on GCPL with a price target of ₹1,100 per share. The brokerage highlighted the new CEO’s focus on portfolio transformation, category expansion and reviving the company’s core businesses.
Morgan Stanley has an ‘Equalweight’ rating on GCPL with a price target of ₹1,204 per share.
The brokerage said the new CEO reiterated the company’s medium-term ambition of double-digit volume growth and teens revenue and profit growth. The company also retained its FY27 targets of high-single-digit India volume growth and double-digit consolidated revenue and EBITDA growth.
GCPL plans to invest around ₹200 crore annually in marketing and distribution, with the investment expected to be scaled up gradually, Morgan Stanley said.
The company also plans to correct India general trade inventory of around ₹150 crore, equivalent to 1.7% of revenues. This could create some near-term pressure, although better tools and improved execution are expected to offset the impact at the overall level, according to the brokerage.
CLSA has an ‘Underperform’ rating on GCPL and has cut its price target to ₹743.
The brokerage said GCPL reiterated its guidance but cautioned that India business growth could be lower due to the ongoing general trade inventory correction, higher investments in R&D, go-to-market and marketing, and a challenging input cost environment.
GCPL has laid out a long-term ambition of double-digit volume growth and teens consolidated revenue and profit growth beyond FY27. However, CLSA said investors are likely to track quarterly performance closely, given the company’s underperformance against its previous long-term guidance issued in December 2021.
CLSA has cut its FY27-FY29 consolidated PAT estimates by 4-6%.
