Company: Godrej Consumer Products is a leading emerging markets company. As part of the 124-year young Godrej Group. They are growing fast and have exciting ambitious aspirations. Proud to be an Indian MNC. Today, Godrej Group enjoys the patronage of 1 Cr consumers globally, across different businesses. They rank among the largest Household Insecticide and Hair Care players in emerging markets. Household Insecticides, are the leader in India, the second-largest player in Indonesia, and are expanding their footprint in Africa. They are the leader in serving the Hair Care needs of women of African descent, the number one player in Hair Colour in India and Sub-Saharan Africa, and among the leading players in Latin America. Rank number two in soaps in India and are the number one player in Air Fresheners and Wet Tissues in Indonesia.
Have wonderful brands like Goodknight responsible for 1000 Cr sales, Even HIT & Cinthol with around 500-1000 Cr sales & brands like Aer with 250 Cr to 500 Cr sales. Household Insecticides like Good Knight and Hit make Godrejcp the biggest player in India and even the leading player in Indonesia. Able to do around 50% of Business from International Operations. All major brands like Cinthol, Good Knight & Hit are booming.
Consistent growth in the last many years has been seen. This year we saw 12200 Cr revenue and 1800 Cr profits v/s they were just making revenue and profits of 500 Cr and 50 Cr during the year 2002. The wonderful growth of 18% CAGR for the last 2 decades. That was the reason we were positive in this company for the last many years. Investment done 15 years back is already close to 200 Times + entire investment has been received in terms of dividend. They are a low-debt company.
Current Status:
From a category perspective, we saw a strong performance in Personal Care, which grew by 18%. Home Care delivered a weak performance and declined by 7%. From a geographical perspective, India grew at 9%. Africa, USA and Middle East business continued its robust growth trajectory, growing at 15% in INR and 14% in constant currency terms. Performance in our Indonesian business was weak, declining by 15% in INR and 16% in constant currency terms. Overall sales grew by 11%, remaining on track to achieve double-digit sales growth for the full year, it was driven entirely by price-led growth. Household Insecticides: Weak performance driven by Indonesia, relatively muted season in India. We saw margins decrease due to higher commodity inflation which affected the profits as Profits grew just by 4%. Improvements in Margin could be seen from Q3. Yet both sales and profits were in line and as expected. We saw a decrease In borrowing from 1768 cr last year to 1608 cr this year. Higher Advertisement & Publicity spends of 7%.
This year again we saw the lifetime high sales in the row for 2nd year but still Profits are lagging. Godrej cp was not able to cross lifetime high profits of 2342 cr which was seen during the fy_2019 & hence Godrejcp is still in the correction mode. It seems that we may take another year to cross this profits. This year now we expect 11% sales growth and just 4% profit growth which will take the company to lifetime high sales but profits even this year will stay affected. This will be 3rd year in the row without lifetime high profits, and hence we can see the price also affected since the past 3 years.
Future:
We may see Godrejcp reach 17000 Cr sales and we may reach near lifetime high profits till 2025. Till the end of this decade, we may see 30000 Cr sales and 4000 Cr Profits. Many investors here already are in buying for decade at around 100 prices and took the benefit of all falls. New Buying again can be done during any fall near in the whole range of 730 to 530 (upgraded from 430). Those who Bought even Near 600 last year or those buying during this fall can book some Profits this year near 1411. The multiyear rally could be expected this decade along with consistent earnings.
Promoters hold around 63% stake. 5% with MF & Insurance companies. 26% holding is with FPI and only 4.5% of retail investors have an interest in this type of wealth creator company.
