Godrej Consumer Products - 1QFY2013 Result Update - Motilal Oswal

Godrej Consumer's (GCPL) 1QFY13 consolidated results are in-line with Sales up 27% at INR13.8b (est INR13.2b), EBITDA up 39% at INR2b (est INR2b), and Adj PAT up 30% at INR1.3b (est INR1.3b).

- India business reported sales of INR7.8b, up 23% YoY. Gross profit at INR2.6b increased 25%. EBITDA margins remained flat YoY at 14.9%. Adj PAT increased only 5% on account of INR110m forex loss and steep increase in interest cost from INR5m to INR30m.

- International business sales grew 31% YoY to INR6.1b, and EBITDA grew 90% to INR889m. EBITDA margin expanded ~200bp YoY to 14.5%.

- Africa (10% of Cons Sales, includes Rapidol, Kinky, Tura and Darling Group) reported sales of INR1.44b and EBITDA of INR274m (INR247m in 4QFY12), with EBITDA margin of 19%. The company has received pioneer tax status in Nigeria resulting in a tax reversal of INR165m (INR80m after minority interest).

- Latin America (6% of sales) sales grew 94% YoY to INR1.1b led by new product launches and Chile business consolidation. EBITDA margin expanded ~120p YoY due to strong sales on the back of new launches. The company incurred INR60m exceptional severance cost and stamp duty charges.

- The stock trades at 27.6x FY13E and 22.7x FY14E (current estimates). Maintain Neutral.

Source : Equity Bulls

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