Mon Dec 09 06:29:09 UTC 2024: ## Godrej Consumer Products Shares Plunge on Weak Demand Forecast
**MUMBAI, INDIA** – Shares of Godrej Consumer Products Ltd (GCPL) plummeted nearly 10% on Monday, reaching a day low of Rs 1,102, after the FMCG giant issued a cautious outlook for the current quarter (Q3 FY25). The company cited subdued demand and anticipated margin pressures as key reasons for the projected slowdown.
GCPL expects flattish underlying volume growth and mid-single-digit sales growth for its standalone business in Q3 FY25. The company also anticipates a temporary dip in EBITDA margins, partly attributed to adverse weather conditions impacting its Home Insecticides (HI) segment, which accounts for one-third of its standalone business. Delayed winters in the North and a cyclone in South India negatively affected HI category growth.
Despite the near-term challenges, GCPL emphasized that the broader business remains strong and that international operations continue to perform well. The company expects this to be the fourth consecutive quarter of healthy EBITDA margins for its Godrej Africa, USA, and Middle East (GAUM) segment.
Analyst opinions are divided. CLSA issued an ‘Underperform’ rating with a target price of Rs 1,000, citing concerns about Q3 sales and EBITDA, as well as continued seasonal volatility in the HI segment. Conversely, UBS and Jefferies maintained ‘Buy’ calls, with target prices of Rs 1,450 and Rs 1,550 respectively. JPMorgan kept an ‘Overweight’ rating (target price Rs 1,410), while Macquarie downgraded its rating to ‘Neutral’ with a reduced target price of Rs 1,260. Promoters currently hold a 63% stake in GCPL.
First Piper 