JPMorgan has reiterated its Overweight (OW) stance on Godrej Consumer Products Limited (GCPL) with a target price of ₹1,365. Following an analyst call, GCPL’s CFO clarified the reasons behind the weakness in Q3, attributing 85-90% of the volume deceleration to cyclical factors, not structural issues in household insecticides (HI) or broader consumption trends. Importantly, rural markets continue to track ahead of urban regions.
GCPL anticipates soaps volume growth to normalize over the next two quarters, provided there are no further price hikes for crude palm oil (CPO). Additionally, a faster recovery for the HI segment is expected if seasonality remains favorable in Q4.
After a sharp selloff in the stock, JPMorgan finds GCPL’s risk-reward equation more reasonable and anticipates outperformance relative to peers. The brokerage highlights GCPL’s strong position in the household segment, with a cyclical rebound likely to aid growth.
