Godrej Consumer Products Shares Plummet Nearly 5% Amid Margin Worries; Motilal Oswal Maintains Bullish Outlook

Godrej Consumer Products Shares Slip 5% Amid Margin Pressures

Godrej Consumer Products (GCPL) shares declined nearly 5% on Thursday, following the company's underwhelming March-quarter earnings. The stock was trading at Rs 1,044.50, down 4.53% in afternoon trade.

The company reported a 9.7% year-on-year rise in Q4 net profit to Rs 452 crore, backed by steady volume growth and resilient performance across key product categories. Revenue for the quarter rose 11% to Rs 3,900 crore from Rs 3,514 crore a year ago. EBITDA also grew 11% to Rs 841.4 crore from Rs 759.2 crore, while EBITDA margin remained flat at 21.6%.

Consolidated sales in Q4 FY26 increased 11% year-on-year, driven by underlying volume growth of 6%. The standalone business posted volume growth of 8%, with sales rising 10%.

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Brokerages have expressed varying opinions on the stock's near-term outlook. While some remain optimistic, others have flagged near-term margin pressures due to rising input costs.

JM Financial Institutional Securities maintained its "Add" rating and raised its target price to Rs 1,250 from Rs 1,150. The brokerage noted that while margins are likely to remain under pressure due to cost inflation, price hikes and cost-saving initiatives could keep EBITDA margins within normative guidance.

Nuvama Wealth Management lowered its target price to Rs 1,505 from Rs 1,565 and reduced EPS estimates for FY27 and FY28 by 4% each. The brokerage expressed concerns about the performance of the soaps business, which remains below expectations despite GST-led benefits and market share gains.

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ICICI Securities maintained its "Add" recommendation with an unchanged target price of Rs 1,200. The brokerage noted that GCPL is capitalising on supply-chain disturbances due to the war in West Asia and rising costs through category development and calibrated price hikes to protect absolute EBITDA.

Morgan Stanley maintained its "Equal-weight" rating with a target price of Rs 1,159. The brokerage expects stronger pricing-led topline growth in Q1 and Q2FY27, although margins may remain under pressure. It also noted that the company implemented price hikes across soaps, detergents, and home insecticides in April.

Motilal Oswal Financial Services maintained its "Buy" call with a target price of Rs 1,300. The brokerage noted that management remains focused on improving domestic business volumes and driving efficiencies across the value chain. It added that profitability in the GAUM business is expected to improve, while recovery in the Indonesia business could become more meaningful from FY27.