Godrej Consumer Q2 Results Review - Inline; Material Cost Outlook Improves Notably: Motilal Oswal

Motilal Oswal Report

Godrej Consumer Products Ltd. declared an in-line set of numbers in its Q2 FY23 results. While there was some sequential gains on the gross margin front in Q2 FY23, the steep ~50% fall in palm oil cost from peak will result in markedly higher gross margin gains in H2 FY23E and FY24E.

Godrej Consumer is using part of the gains to bolster its ad-spends (up ~50% YoY in Q2 FY23, bucking the trend of peers for the quarter) to boost medium-term revenue growth prospects.

The management retained its double-digit sales growth target in the current year and medium-term sales outlook is also attractive.

This along with steep material cost reduction is likely to lead to extremely strong earnings growth from Q4 FY23. Balance sheet improvements are also remarkable with 25% stock keeping unit reduction in India contributing to doubling of India business operating cash flows YoY.

Click on the attachment to read the full report:

DISCLAIMER

This report is authored by an external party. BQ Prime does not vouch for the accuracy of its contents nor is responsible for them in any way. The contents of this section do not constitute investment advice. For that you must always consult an expert based on your individual needs. The views expressed in the report are that of the author entity and do not represent the views of BQ Prime.

Users have no license to copy, modify, or distribute the content without permission of the Original Owner.