Bluechip FMCG Stock Declares 500% Interim Dividend, PAT Up 20% In Q2: Buy?

Within the FMCG industry, Godrej Consumer Products is a well-known firm. As a leading FMCG company in emerging regions, Godrej Consumer Products is a part of the over 125-year-old Godrej Group. In emerging regions, the firm is one of the largest players in hair care and home insecticides. It is also the second-largest player in Indonesia, a leader in home insecticides in India, and growing its presence in Africa. The company announced its Q2 earnings as well as a 500% interim dividend for FY24 which may gain attraction from market watchers looking for dividend-paying bluechip stocks.

Godrej Consumer Products Dividend

The Board of Directors have "Declared interim dividend @ Rs. 5/- per share (500% on shares of face value of Re. 1/- each) for the financial year 2023-24. As intimated earlier the Record Date for ascertaining the names of the shareholders who will be entitled to receive the said dividend is Thursday, November 9, 2023. The dividend will be paid on or before Friday, December 01, 2023," said Godrej Consumer Products in a stock exchange filing.

Godrej Consumer Products Q2 Results

For the July-September quarter, Godrej Consumer Products (GCPL) recorded a consolidated net profit of Rs 432.77 crore, up 20.59 per cent from Q2FY23. The company's sales jumped by 6.19 per cent to Rs 3,601.95 crore in the quarter under review. In Q2FY24, its EBITDA climbed by 29.9 per cent to Rs 704 crore, and its EBITDA margin jumped by 360 basis points from the quarter of the previous fiscal year to 19.6 per cent. 2Q FY 2024 consolidated sales jumped by 6% in INR terms, driven by a ten per cent spike in volume and a 16% annual rise in constant currency. Its business sales in India climbed by 9% annually, driven by an 11 per cent rise in volume.

Sudhir Sitapati, Managing Director and CEO, GCPL, said "We delivered a steady performance in 2Q FY2024, despite the tough operating environment. Our Consolidated volumes grew in double-digits at 10% while sales grew by 6%. Sales in constant currency terms grew by 16%. In India, we delivered 11% volume growth. In Indonesia, our performance continues to improve with double-digit constant currency growth of 14%. Africa, USA and Middle East continue to grow in double-digits in constant currency terms, while performance in INR terms was impacted due to the Naira devaluation."

"Our quality of profits continues to improve consistently over the last few quarters with reported Consolidated Gross Margin improving sharply by 700 bps year-on-year and 110 bps quarter-on-quarter. Our EBITDA* Margin, too, improved by 360 bps year-on-year despite continued media investments, which increased 33% year-on-year. We continue to remain focused on driving volume-led growth along with healthy investments in our brands and improvement in profitability. We continue to have a strong balance sheet. We are on track in our journey to reduce wasted cost and are deploying this to drive profitable and sustainable volume growth across our portfolio through category development. We remain committed to our purpose of bringing the goodness of health and beauty to consumers in emerging markets," said Sudhir Sitapati.

Godrej Consumer Products Share Price Target

Deven Mehata-Equity Research Analyst at Choice Broking said, "Godrej Consumer Products Limited (GODREJCP) appears to have exhibited a notable resurgence in its stock price. It recently rebounded from a support level of 960 and is presently trading at around 985. The fact that the stock has crossed both the 20-day and 200-day Exponential Moving Averages (EMA) suggests that there's significant strength in this bounce-back. Additionally, the Relative Strength Index (RSI) indicator, which hovers around the 49 level, indicates a balanced market sentiment, potentially poised for an upward move."

"There's a minor resistance level at 1010, which the stock needs to breach. If it successfully closes above this level, it may have the potential to advance towards 1050 and beyond. This information is valuable for investors considering entry or those already holding the stock. Those with existing positions should consider trailing their stop loss just below the mentioned support levels," he added.

Disclaimer

The recommendations made above are by market analysts and are not advised by either the author, nor Greynium Information Technologies. The author, nor the brokerage firm nor Greynium would be liable for any losses caused as a result of decisions based on this write-up. Goodreturns.in advises users to consult with certified experts before making any investment decision.