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On Tuesday, Citi reiterated its Buy rating on Godrej Consumer Products Ltd (GCPL:IN) stock with a price target of INR1,400.00. The firm's analysis highlighted a mixed performance in the company's first-quarter trading update.
Godrej Consumer's India operations sustained strong growth, with estimated organic volume and revenue growth of 7% and 5%, respectively, and reported growth figures of 12% and 10%.
The company's international segments, however, faced challenges, with currency depreciation affecting performance. The Indonesia business is projected to grow by 8% in INR terms, while the Africa cluster is expected to see a 21% decline in revenue, also measured in INR terms. Overall, this results in a modest 1% consolidated revenue growth for Godrej Consumer in the first quarter.
Profitability appears more robust, with an estimated 13% year-over-year growth in consolidated EBITDA. This is attributed to stable margins in India and margin expansion in the Indonesia and Africa clusters.
Citi's commentary also pointed to potential future growth drivers, including the launch of a new active ingredient-based liquid vaporizer in the Indian Household Insecticides market. The firm believes that Godrej Consumer's strategic initiatives are likely to sustain growth and earnings momentum, supporting the company's valuation.
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