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Godrej Consumer Products Ltd. (GCPL)
Q4FY23 and FY23 Result Analysis
Q4FY23 Performance Highlight
Consolidated Q4 - Performance Highlights
Subsegment Performance
4Q FY 2023 consolidated sales grew by 10% in INR led by volume growth of 6%; constant currency growth of 14% year-on-year
India Business Performance
Segmental Performance
Home care segment grew by 14% YoY, with a 2-year CAGR of 6%. Growth was driven by premium formats of electrics and aerosols, with both non-mosquito portfolio and mosquito portfolio (80% salience) growing in double digits.
Personal Wash & Hygiene segment continued its momentum with ~17% YoY sales growth (2-year CAGR of 19%). The company continued to gain market share and deepen penetration through micro-marketing initiatives and consistent marketing investments.
Indonesia Business Performance
Core business performance improves in Indonesia with sales growth of 5% in constant currency terms. Sales, excluding Hygiene (Saniter), saw a growth of 11% in constant currency terms. EBITDA margins at 21.5% were flat year-on-year. We also completed the transition to a distributor model.
Africa, USA and Middle East Business Update
Africa, USA and Middle East cluster delivered high single-digit sales growth of 8% in constant currency terms. Performance was impacted by election and demonetisation in Nigeria; however, business saw recovery in March 2023. We continue to deliver double-digit sales growth in the FMCG category. EBITDA margins at 10% expanded by 860 bps year-on-year due to a lower base.
Concall Highlights
Historical Financial Performance
Profit and Loss
Balance Sheet
Cash Flow
Margin and Profitability
Risk
Valuation and Outlook
This quarter, GCPL's operational performance exceeded our projections. GCPL has pleasantly pleased on the margins front. It is highly commended that the domestic business saw volume growth of 11%. The volume growth is anticipated to continue steady at mid-single digits on an overall basis. Future margin improvement will be aided by raw material price stability, cost-cutting initiatives, and the proper size of overseas business. Due to this quarter's strong performance and the company's expanding expectations for its foreign business, we continue to HOLD. The stock is presently priced at 42x EPS for the FY25E.
I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.
I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Stocx Research Club). I have no business relationship with any company whose stock is mentioned in this article.
Disc - Not an recommendation. Source - Company presentation, press release, conference call and StocX.in
I am not a SEBI Registered individual/entity and the above research article is only for educational purpose and is never intended as trading/investment advice.
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