Godrej Consumer Products Ltd - Ventura

GCPL's domestic business has consistently clocked double digit revenue growth (in its core product categories) over the past several quarters and we expect this growth to be maintained on the back of the high growth of the Household Insecticides and Soaps segment.

While the domestic business is the mainstay of GCPL operations, the growth over the next couple of years is expected to be driven by growth of its international businesses and from cross pollination of brands in its portfolio across markets. In the international business, integration of existing operations with recent acquisitions in Africa (Darling Group) and Argentina (Cosmetica Nacional) is expected to bring synergies and drive revenues over the next few quarters.

With all segments expected to display encouraging growth we expect revenues and earnings to grow at a CAGR of 29.0% & 22.4% to Rs.8,091 crore and Rs.962 crore respectively over the forecast period FY12-14. At the CMP of Rs.677, GCPL is trading at 29.9x and 23.9x its estimated earnings for FY13 and FY14, respectively and we recommend a BUY with a target price of Rs.764 over a period of 15-18 months.

Source : Equity Bulls

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