Nomura has maintained its 'Buy' rating on Godrej Consumer Products (GCPL) with a target price of Rs 1,300 after the company's June quarter business update came in ahead of expectations.
The brokerage said consolidated revenue growth is likely to be in the "high-teens y-y" (around 16-17%), exceeding the company's FY27 guidance of double-digit growth. This is expected to be driven by "high-single-digit volume growth y-y."
Nomura estimates consolidated EBITDA growth at around 14% year-on-year, in line with the company's indication of "higher than double-digits," also ahead of its full-year guidance.
In India, which contributed 62% of FY26 consolidated sales, revenue growth is expected at 13-14%, supported by high-single-digit volume growth. The brokerage also highlighted a stronger-than-expected recovery in the international business.
According to the report, Indonesia posted "mid-teens revenue growth" led by "double-digit volume growth and market share gains," while the company believes "the competitive pressures are abating and the profitability of the business is back." Nomura also expects the Godrej Africa, USA and Middle East (GAUM) business to report mid-20% sales growth, aided by strong currency tailwinds.While GCPL expects input cost inflation of around 6-9% to weigh on margins in the first quarter, the company remains confident of a gradual recovery through pricing actions, cost savings and media optimisation. It also noted that "cost pressure is easing towards the end of 1Q."
The brokerage said GCPL has already implemented price hikes of about 5% in soaps and household insecticides and 7% in detergents, translating into an estimated 3-4% increase across its overall portfolio.
Nomura noted that the company is tracking ahead of its FY27 guidance, with standalone volume growth meeting expectations and consolidated revenue and EBITDA growth exceeding guidance in the first quarter.
"The 1Q update has been better than expected," the brokerage said, adding that improvements in both the India and international businesses should support margin recovery over the coming quarters, although higher investments in new brands could keep EBITDA growth in the early double digits in the near term.