Gcpl Shares To Perform Well In Short Term Post Q1 Update, Retain Buy: Nuvama

SUMMARY

Godrej Consumer Products Ltd (GCPL) has posted a robust Q1FY26 business update, according to Nuvama, which forecasts a affirmative outlook for nan company. The patient highlighted that location is simply a "beat connected India volumes; and that nan outlook is strong," suggesting that GCPL's banal is expected to execute good successful nan adjacent term.

The FMCG sector, excluding summer-related categories, is showing unexpected affirmative trends. "FMCG companies (ex-summer categories) are astonishing positively, indicating nan worst of slowdown is down and a gradual betterment ahead, it said." Nuvama noted that GCPL is among nan firms benefiting from this sectoral recovery. This inclination suggests that user assurance is gradually returning, which could further bolster GCPL's capacity successful nan coming quarters.

Home insecticide (HI) successful India has exceeded expectations pinch mid-to-high single-digit growth, mostly driven by incense sticks and caller electrical formulations. This maturation is attributed to a beardown June recovery, aided by caller advertizing campaigns and favourable upwind conditions. However, aerosols stay weak, which could effect wide performance. The institution is apt to attraction connected strengthening its aerosol conception to mitigate these weaknesses.

The home conception is anticipated to present high-single-digit worth growth, driven by mid-single-digit measurement growth. Although nan soaps class has exhibited weakness owed to grammage cuts, it is expected to retrieve from Q3 FY26 onwards. Nuvama remarked, "EBITDA separator for Q1FY26 could beryllium beneath normative range." This indicates a cautious attack arsenic nan institution navigates done fluctuating marketplace conditions.

Indonesia's marketplace has faced challenges, pinch level measurement maturation and imaginable year-on-year income diminution owed to competitory pressures successful location insecticides and aerial fresheners. Conversely, nan GAUM business is expected to acquisition beardown double-digit worth and measurement growth, bolstered by coagulated profitability. This world capacity highlights nan divers challenges and opportunities GCPL faces crossed its markets.

The outlook for GCPL is optimistic, pinch nan institution targeting mid-to-high single-digit measurement maturation for FY26. On a standalone basis, GCPL is expected to witnesser precocious single-digit gross maturation and double-digit EBITDA growth. This projection aligns pinch nan company's strategy to heighten its marketplace position and leverage its strengths successful various segments. The strategical attraction connected invention and marketplace description is apt to thrust sustained growth.

The company's consolidated gross is expected to turn by astir 11.2% year-over-year for Q1FY26. Meanwhile, nan EBITDA separator is forecasted to diminution by 400 ground points owed to accrued thenar lipid prices affecting soap margins. This effect is partially attributed to disruptions caused by competitors for illustration HUL successful nan soap sector, which could power pricing strategies. The institution is expected to research costs optimization measures to antagonistic these challenges.

In summary, Nuvama has retained a 'Buy' proposal for GCPL pinch a target value of Rs 1,460. The patient anticipates that GCPL's banal will acquisition favourable movement, bolstered by nan company's strategical initiatives and promising maturation prospects crossed various segments. This affirmative outlook reflects assurance successful GCPL's expertise to navigate challenges and capitalize connected maturation opportunities, ensuring semipermanent shareholder value.

Published on: Jul 7, 2025 8:42 AM IST