Godrej Consumer shares climb 6% on upbeat outlook post Q2 results

Godrej Consumer Products' shares rallied even after its net profit fell 6.5 per cent in the July-September quarter to ₹459.3 crore

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Shares of Godrej Consumer Products Ltd. (GCPL) rose nearly 6 per cent on Monday after analysts remained positive with some upgrading stock ratings on the improved outlook after it reported its September quarter earnings. 

 

The consumer major's stock rose as much as 5.92 per cent during the day to ₹1,184.8 per share, the biggest intraday rise since July 7 this year. The stock pared gains to trade 4.1 per cent higher at ₹1,163 apiece, compared to a 0.16 per cent advance in Nifty 50 as of 9:24 AM. 

 

Shares of the company rose for the third straight session. The counter has risen 7.5 per cent this year, compared to an 8.6 per cent advance in the benchmark Nifty 50. GCPL has a total market capitalisation of ₹1.17 trillion. 

GCPL Q2 results 

Godrej Consumer Products' consolidated net profit fell 6.5 per cent in the July-September quarter to ₹459.3 crore. Its net sales grew 4.3 per cent to ₹3,825.1 crore. It reported a volume growth of 3 per cent in the quarter under review in the domestic business.  

 

Its profit before interest, tax, depreciation and amortisation fell 5.8 per cent in the quarter ended September to ₹796.2 crore. 

 

Commenting on its results, Sudhir Sitapati, managing director & chief executive officer, said, “Q2 FY26 has been a resilient quarter for Godrej Consumer Products, especially given the backdrop of the GST transition in India and continued macroeconomic challenges in Indonesia.”

GCPL to acquire Muuchstac 

GCPL has signed a definitive agreement to acquire the FMCG business under the ‘Muuchstac’ brand via slump sale from Trilogy Solutions for approximately ₹449 crore as it aims to drive profitable growth. The deal will be done in two tranches and is an all-cash deal. 

 

In the first tranche, GCPL will make a payment of ₹289 crore for an enterprise value of ₹380 crore, and the second tranche will be 12 months later for approximately ₹160 crore at an enterprise value of ₹400-500 crore.  

Analysts on GCPL Q2 results

Systematix Institutional Equities said it remains positive on GCPL, citing an improving outlook in the key soaps segment driven by stabilising raw material costs, easing pricing pressures, and a recovery in volumes. The brokerage also highlighted a strong growth trajectory in liquid detergents, hair colour, and air fresheners, which is expected to support both revenue and margin improvement in the India business. 

 

On GCPL’s recent acquisition of men’s grooming brand Muuchstac, Systematix noted a significant opportunity to expand distribution, particularly in Tier-3 and Tier-4 markets. 

 

Centrum Broking upgraded the stock to a 'Buy' rating with a target of 1,250 per share. The brokerage said that since its 'Reduce' rating, shares of GCPL have corrected about 10 per cent. 

 

It noted some early signs of tailwinds for the company, including a normalised high single-digit domestic growth in the September quarter once the Goods and Services Tax (GST) transition impact of around 400 basis points is excluded, a performance it termed “decent.”

 

It expects margins to recover, as the consumption of high-cost palm oil inventory is largely over and palm oil prices remain range-bound. GCPL’s entry into new categories, both organically (toilet cleaners) and inorganically (through the acquisition of men’s grooming brand Muuchstac), is expected to broaden its total addressable market.