Brokerages positive on Godrej Consumer on growth recovery, lower costs

Extent of margin gains will depend on extent of ad spends and price cuts

After underperforming its peer index, the BSE FMCG, since the start of the year, the stock of Godrej Consumer Products (GCPL) has recovered and bridged the gap over the past month. The maker of household insecticides (HI) and soaps has given monthly returns of about 7 per cent, about twice the 3.4 per cent delivered by the S&P BSE FMCG index during this period.

The reasons brokerages are optimistic about the stock are the recovery in volumes in the second half of the 2022-23 financial year (H2FY23) and the margin improvement expectations following the easing of raw material costs.

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