Investsmart - Godrej Consumer Products (Buy)
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Deadpresident
Mar 26, 2007, 6:00:46 AM3/26/07
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Better pricing power; Attractive valuations
Godrej Consumer Products (GCPL) is one of India's leading players in the
FMCG industry, operating mainly in soap and hair colour segments. During
FY06-FY09E, GCPL's sales and net profits are expected to increase by a CAGR
of 24.0% and 24.8% respectively. GCPL's net sales are estimated at
Rs11.38bn in FY08 and Rs13.34bn in FY09 while net profits are estimated at
Rs1.88bn and Rs2.36bn respectIvely.The stock is trading at a P/E multiple
of 17.5x and 14x based on FY08 and FY09 earnings, respectively. It is one
of the best bets in the FMCG sector as it is trading at a FY08E PEG of 0.5.
We initiate our coverage on the stock with a 'Buy' rating.
Godrej Consumer Products (GCPL) is one of India's leading players in the
FMCG industry, operating mainly in soap and hair colour segments. During
FY06-FY09E, GCPL's sales and net profits are expected to increase by a CAGR
of 24.0% and 24.8% respectively. GCPL's net sales are estimated at
Rs11.38bn in FY08 and Rs13.34bn in FY09 while net profits are estimated at
Rs1.88bn and Rs2.36bn respectIvely.The stock is trading at a P/E multiple
of 17.5x and 14x based on FY08 and FY09 earnings, respectively. It is one
of the best bets in the FMCG sector as it is trading at a FY08E PEG of 0.5.
We initiate our coverage on the stock with a 'Buy' rating.
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