Motilal Oswal Maintains "Buy" Rating On Large Cap Godrej Stock, Trading Near 52-Week High

Motilal Oswal has come up with new stock to buy the idea from the FMCG sector. The brokerage has picked Godrej Consumer Products Ltd. (GCPL), a leading large cap FMCG sector stock from Godrej Group. It has estimated a target price of Rs 1,080 apiece for the stock and claims a potential upside of up to 17% from its current level. Check below to know more:

Stock performance and returns in the past 5 years

The stock of GCPL last traded at Rs 925.75 apiece, up 1.46% from its previous close of Rs 912.45 apiece. The stock is trading 3,16% down from its 52-week high i.e. Rs 956 apiece. Its 52 week low is Rs 660.05 apiece.

The stock has fallen 0.22% in 1 week, and 0.99% in 1 month, respectively. However, it gained 5% in 3 months. In the past 1 year, it gained 26.16% and in 3 years it gained 49.63%, respectively. In the past 5 years, it gained 28.55%.

Motilal maintains "Buy" Rating on GCPL with a target price of Rs 1,080 apiece

According to the brokerage, GCPL's domestic businesses had demonstrated strong sales growth in the first half of the last decade, before losing steam in the second half. Domestic and consolidated sales growth crossed double digits in the last two years and appears to do so in FY23 as well, far better than the 4.1% sales CAGR between FY16 and FY20.

The brokerage said, "We expect GCPL to be the key beneficiary of the sharp reduction in raw material costs (especially palm oil) from the peak over the next few quarters. With the new CEO focusing on improving growth in the high-margin, high-RoCE domestic business, as highlighted in our recent CEO meet note, GCPL's medium-term earnings growth outlook is strong. The valuation at ~34x FY24E EPS is inexpensive and is at a steep discount to peers. We maintain our BUY rating with a TP of INR1,080 (based on SoTP valuation: 50x domestic business, 20x Indonesia business, 15x GAUM and other business)."

Disclaimer

The stock has been picked from the brokerage report of Motilal Oswal. Greynium Information Technologies, the Author, and the respective Brokerage house are not liable for any losses caused as a result of decisions based on the article. Goodreturns.in advises users to consult with certified experts before making any investment decision.