Result Update: Godrej Consumer Products Ltd (GCPL) - SELL - TP Rs.1756 - Kotak

GCPL's 4Q earnings surprised positively as the company beat our margin estimates significantly. The company has registered fairly robust sales growth, and the management is positive on medium-term outlook for the company/ industry. We project 18% CAGR in earnings over FY17-FY19E. However, with key household insecticides segment looking weak in India/ Indonesia, visibility in sales growth is hampered. We value GCPL at 33X FY19E PER, or Rs 1756 (upwards from Rs 1488 earlier, as we roll-forward to FY19, and revise estimates 4% higher). Strong rally in the stock yesterday, following the earnings beat, bonus (1:1) announcement, has left little margin for error, as CMP implies 36.3x FY19E PER. Maintain SELL.

Shares of GODREJ CONSUMER PRODUCTS LTD. was last trading in BSE at Rs.1909.2 as compared to the previous close of Rs. 1924.8. The total number of shares traded during the day was 108383 in over 1308 trades.

The stock hit an intraday high of Rs. 1928.6 and intraday low of 1889.35. The net turnover during the day was Rs. 206146003.

Source : Equity Bulls

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