Godrej Consumer (GCPL) posted good numbers for the quarter, largely in line with our estimates. Consolidated top-line growth was strong at 96.3% yoy, led by recent acquisitions; domestic revenue growth stood at 53% yoy, aided by full consolidation of Godrej Household Products (GHPL). Earnings grew by modest 54.4% yoy, despite margin contraction, aided by strong top-line growth. Post the results, we have tweaked our numbers. We have revised our earnings estimates by ~4% to factor in higher other income and higher-than-anticipated operating margin. We recommend an Accumulate rating on the stock.
Recent acquisitions drive growth: GCPL reported strong top-line growth of 96.3% yoy to `999.5cr, driven largely by the consolidation of recent acquisitions. Domestic business (including GHPL’s additional 51% consolidation) registered growth of 53% yoy to `657cr. Soaps registered ~13% yoy growth and hair color registered growth of 18% yoy during the quarter. International business revenue stood at `347cr, registering growth of 326% yoy. GCPL’s earnings registered growth of 54.4% yoy to `141.7cr (`91.8cr), despite margin contraction, aided by strong top-line growth.
Outlook and valuation: At the CMP of `394, the stock is trading at 19.4x FY2013E earnings of `20.3. We recommend an Accumulate rating on the stock.
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