Godrej Consumer Products - March 2013 Results Preview - Motilal Oswal

- We expect GCPL to post 24% revenue growth to INR16.3b in 4QFY13E, led by inorganic growth (Chile, Darling Phase II) and strong momentum in domestic household insecticide segment.

- During 3QFY13, GCPL had divested its non-core food business in Indonesia; extraordinary income from the same will be reflected in 4QFY13. Core Indonesian business is maintaining momentum, while LATAM (Argentina) and Africa (Kenya) is experiencing challenges due to political uncertainty and government caveats on pricing.

- Lower palm oil prices should drive our expected 30bp margin expansion to 19.1%. We expect ad-spends to revert to the normal trend, after spiking in 3Q, due to bunching up of new launches.

- Estimate 27.6% PAT growth.

- The stock trades at 27x FY14E EPS and 21.8x FY15E EPS. Neutral.

Source : Equity Bulls

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