Godrej Consumer Products gained almost four percent on September 29 as the company rose the most among Nifty FMCG stocks. At 10:30 am, the scrip was quoting at Rs 918 on the National Stock Exchange.
This comes after Godrej Consumer organised a conference call on September 28 led by Dharnesh Gordhon (Business Head – Godrej Africa, US & Middle East) to discuss its business performance and strategy for the GAUM region.
Domestic brokerage Motilal Oswal said in its note, “The company’s coverage in the area has grown by over 2.5x from 2020 levels. The next phase of growth will be driven by the broadening of its portfolio.”
In GAUM, West Africa (Nigeria and Ghana) accounts for 30-35 percent of the business, followed by South Africa (25-30 percent), Kenya, and smaller nations.
In Nigeria, Godrej Consumer has a presence in 80,000 stores from 10,000 stores at the end of 2020. “The aim is to increase direct expansion to cover 120,000 stores by the middle of 2023,” Motilal Oswal said in its report.
The management said if the current currency exchange rate was like the one two to three years back, margin would have expanded 600-700 basis points. Margin is expected to improve 150 bps due to higher raw material and freight costs and forex fluctuations.
Motilal Oswal has a buy rating with a target price of Rs 1,075 on the stock.
Jefferies too has a buy call with a target price of Rs 1,040. “Distribution expansion, portfolio simplification, and focus on the core have helped. However, the job is not yet done and Gordhon expects to build on the journey so far,” it said.
Morgan Stanley has an overweight call with a target price of Rs 1,101 per share: “The management’s mindset has changed from a ‘wholesaler’ to an ‘FMCG’ approach. The company is focussed on reducing complexity in operations without shrinking geographical footprint.”
No comments:
Post a Comment