Godrej Consumer Products - Q1FY11 Updates - WAY2WEALTH

Domestic business disappoints: Results of Godrej Consumer Products (GCPL) disappointed on the domestic front with revenue growth mainly driven by the recent acquisitions. The domestic business de-grew by 6.6% to Rs 317.4 crores, while the consolidated revenue growth was 46.5% to Rs 643.1 crores.

In the coming quarters, the Company expects the weightage of home care and hair care to increase and personal wash to come down with full quarter consolidation of new international business and 100% share in GHPL. We believe that the incremental growth is likely to come from its international operations and further inorganic acquisitions. International operations have grown by 84% during the quarter and forms 29% of the consolidated revenues. At the CMP of Rs 353, the stock quotes at P/E of 24.5x its FY11E earnings of Rs 14.4. We maintain our Accumulate recommendation.

Source : Equity Bulls

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