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Motilal Oswal
Godrej Consumer (Buy)
Target: ₹1,250
CMP: ₹1,052.95
The management of Godrej Consumer Products (GCPL) held an analyst meet with Akhil Chandra to discuss the progress in its Indonesia business. Here are the takeaways:
The Indonesia business has been seeing gradual recovery in demand post the second Covid wave despite a tough macroeconomic situation. Given the recent bold economic reforms implemented by the Indonesian government, Chandra is confident GCPL has the building blocks in place to capitalise on these reforms and deliver double-digit profitable growth over the medium term.
The management aims to drive growth in its largest segment, household insecticides, through democratisation and premiumisation. Furthermore, it would do so by gradually occupying whitespaces within the category by migrating consumers to aerosols and electrical products.
Hygiene now accounts for 10 per cent of GCPL Indonesia’s sales – fairly impressive given GCPL Indonesia’s recent entry into the segment. The management is now leveraging its Saniter brand and moving into personal care categories, such as soaps and personal wash with powder-to-liquid and liquid formats.
Project RISE seeks to dramatically increase GCPL’s direct reach as well as SKU throughput per outlet.
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