Shares of Godrej Consumer Products experienced a notable surge, climbing 2.4% to reach a peak of Rs 1,187.90. This uptick followed a positive assessment from brokerage firm Nuvama, which reaffirmed its Buy rating after a recent pre-quarterly business update. Despite this rise, the stock remains approximately 23% below its 52-week high of Rs 1,541.85.

Positive Insights from Nuvama

Nuvama’s analysts indicated that the business update from Godrej aligned with their projections. They expect the value of the Indian operations to increase by 8.5% year-on-year, with domestic volumes anticipated to grow by 5% YoY, surpassing their previous estimate of 3-4%. Additionally, the EBITDA margins for domestic markets are predicted to stabilize around 22%, which is in line with expectations.

• Home Care Segment: Projected volume growth of 14% YoY, boosted by a rebound in household insecticides, which are likely to see a 10% growth YoY.
• Target Price: Nuvama has set a price target of Rs 1,460 for the stock, maintaining their optimistic outlook.

Godrej’s Focus for Q4

The management team at Godrej has emphasized their commitment to enhancing the underlying volume growth (UVG) trajectory as they move into the March quarter. They aim to sustain the EBITDA margin amid rising costs while also pursuing growth in their international markets. An official statement noted, “We remain largely on track to achieve all stated objectives.”

While specific figures were not disclosed, the company anticipates mid-single-digit growth in UVG and revenue growth in the high single digits. This expected growth is driven by a mid-teens UVG in home care, despite a slight decline in the personal care sector.

Overview of Recent Performance

In the previous quarter (Q3 FY25), Godrej Consumer reported a 14.2% YoY decline in consolidated net profit, totaling Rs 498.31 crore, down from Rs 581.06 crore the previous year.

Stock Performance Snapshot

• Recent Trends: The stock has appreciated by 4% over the last five trading sessions.
• Monthly Gain: A 14% return has been noted over the past month.
• Longer-Term Trends: However, the stock has seen a 9% decline over the last six months and a 5% drop year-on-year.

In summary, while Godrej Consumer Products has faced challenges, the latest updates and optimistic forecasts suggest a potential rebound, making it a stock to watch in the FMCG sector.