..... . VALI disclosures . .....: 30/10/26, Godrej Consumer Products

Friday, October 30, 2026

30/10/26, Godrej Consumer Products

Shares of Godrej Consumer Products Ltd (GCPL) plunged over 7 percent to a four-year low of Rs 777.20 on Friday, October 30, on the NSE, as investors weighed the company's July-September quarter earnings against mounting concerns over higher input costs, deteriorating microeconomic condition, margin pressure and a pending leadership appointment for its India business.

The Godrej Group stock opened at Rs 815 and fell 7.14 percent from its previous close of Rs 837 to hit an intraday low of Rs 777.20 on the NSE, its lowest level in over four years. It eventually pared some losses to settle 2.27 percent lower at Rs 818.10. The stock was the top loser on the Nifty FMCG index, which closed 0.53 percent lower at close.

Godrej Consumer Products shares have fallen nearly 5 percent so far in October and 26.80 percent over the past one year. The stock is down 34.46 percent on year-to-date basis.

GCPL Q2 results

The selloff came despite the fast-moving consumer goods (FMCG) major reporting the highest on-year rise in its net profit in the last six quarters for the September quarter, in which its bottom line declined for two quarters. It reported a 13.84 percent year-on-year increase in its consolidated net profit to Rs 522.92 crore for the September quarter of FY27, driven by volume growth. It had posted a net profit of Rs 459.34 crore in the July-September quarter a year ago

However, rising input costs and concerns over the sustainability of margin recovery have tempered investor sentiment. The absence of a new chief executive officer for the company's India business remains another overhang.

Total revenue from operations rose 19 percent to Rs 4,413.09 crore in Q2 FY27, against Rs 3,708.19 crore in the corresponding period of the preceding fiscal.

In Q2 FY27, consolidated sales grew by 19 percent YoY on the back of underlying volume growth of 8 per cent, the company said in its earnings statement.

The FMCG major reported a 12 percent YoY growth in EBITDA (earnings before interest, taxes, depreciation, and amortisation). Total expenses of GCPL stood at Rs 3,758.26 crore, up 20.6 per cent YoY, in the second quarter of FY27.

Brokerages on GPCL share: HSBC retains Hold; CLSA remains cautious

Brokerages offered a mixed outlook on GCPL after the earnings announcement, with concerns over inflation and margins offset by confidence in its volume growth and full-year guidance.

HSBC on GPCL share: Hold, Target price Rs 960

Brokerage firm HSBC has maintained a ‘Hold' rating on the stock with a target price of Rs 960. The brokerage noted that India and consolidated volume growth remained stable at 7 percent and 8 percent, respectively, while EBITDA growth came in at 12 percent YoY. Africa emerging as the company's top-performing region.

HSBC believes GPCL is on course to meet FY27 guidance, but rising inflation continues to pose a headwind, especially for India margins. The brokerage made modest EPS revisions but retained ‘Hold' as management change and raw material overhang cloud outlook.

CLSA on GCPL share: Underperforms, Target price Rs 747

CLSA, meanwhile, maintained its ‘Underperform' rating with a target price of Rs 747. The brokerage noted that consolidated sales growth was at 19% YoY, or 15% in constant currency terms. However, raw material inflation led to a 500-bps standalone gross margin contraction YoY, despite pricing growth of 6%.

Consolidated EBITDA was in line with CLSA's estimates but 2% below consensus expectations. The brokerage also said that GCPL highlighted further aggressive pricing increase in the soaps and detergents portfolio as both businesses retain normal margins.

GPCL has maintained guidance of double-digit consolidated revenue and Ebitda growth in FY27.

Emkay on GPCL share: Buy, Target price Rs 1,250

Emkay Global Financial Services reduced its target price on GCPL by 12 percent to Rs 1,100 from Rs 1,250, while maintaining its ‘Buy' recommendation.

The brokerage expects the company's revenues to grow 12 percent at a compounded annual rate. The company's guidance for "double-digit" sales and earnings before interest, tax, depreciation, and amortisation for 2026-27 (Apr-Mar) is achievable, Emkay Global said.

Looking forward, the company's management expects to maintain its consolidated double-digit growth in revenue and earnings before interest, tax, depreciation, and amortisation in the second half of the current financial year, through cost savings, price hikes and investing in brands. The company's management expects detergent growth to remain strong, due to formalisation and migration from powders to liquids. While soaps continue to face pricing issues due to severe raw material inflation. This could be offset by growth in other segments, it said.

Equirus Securities: Long, Target price Rs 1,087 with 30% upside

Equirus Securities maintained a ‘Long' rating on GCPL with a target price of Rs 1,087, implying an upside potential of around 30 percent.

Motilal Oswal on GPCL share: Buy, Target price Rs 1,050 with 25% upside

Motilal Oswal Financial Services retained its ‘Buy' outlook on GCPL with a target price of Rs 1,050, implying an upside potential of around 25 percent. The brokerage maintained its earnings-per-share estimates for FY27-FY29 and expects the company to deliver high-single-digit underlying volume growth (UVG) in India alongside double-digit consolidated revenue and EBITDA growth in FY27.

It expects GAUM continue to deliver strong growth and profitability, while Indonesia's momentum to remain healthy. “Elevated commodity inflation is likely to keep near-term margins under pressure. However, calibrated pricing and cost-saving initiatives should support absolute EBITDA growth, with margin recovery hinging on pricing realization and input-cost trends,” it said.

It expects revenue and EBITDA to grow at compound annual growth rates of 14% and 13%, respectively, over FY26-FY29

Written by Sharmeeli Mallik

Source : Network18

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Trade Cycles

The four important features of Trade Cycle are (i) Recovery, (ii) Boom, (iii) Recession, and (iv) Depression!

The trades cycle or business cycle are cyclical fluctuations of an economy. A full trade cycle has got four phases: (i) Recovery, (ii) Boom, (iii) Recession, and (iv) depression. The upward phase of a trade cycle or prosperity is divided into two stages—recovery and boom, and the downward phase of a trade cycle is also divided into two stages—recession and depression.

Phases of Trade Cycle:

The phases of trade cycle are explained with a diagram:

(1) Recovery:

In the early period of recovery, entrepreneurs increase the level of investment which in turn increases employment and income. Employment increases purchasing power and this leads to an increase in demand for consumer goods.

As a result, demand for goods will press upon their supply and it shall, thereby, lead to a rise in prices. The demand for consumer’s goods shall encourage the demand for producer’s goods.

The rise in prices shall depend upon the gestation period of investment. The longer the period of investment, the higher shall be the price rise. The rise of prices shall bring about a change in the distribution of income. Rent, wages, interest do not rise in the same proportion as prices.

Consequently, the margin of profit improves. The wholesale prices rise more than retail prices. The prices of raw materials rise more than the prices of semi-finished goods and the prices of semi-finished goods use more than the prices of finished goods.

(2) Boom:

The rate of investment increases still further. Owing to the spread of a wave of optimism in business, the level of production increases and the boom gathers momentum. More investment is possible only through credit creation. During a period of boom, the economy surpasses the level of full employment and enters a stage of over full employment.

(3) Recession:

The orders for raw materials are reduced on the onset of a recession. The rate of investment in producers’ goods industries and housing construction declines. Liquidity preference rises in society and owing to a contraction of money supply, the prices falls. A wave of pessimism spreads in business and those markets which were sometime before sellers markets become buyer’s markets now.

(4) Depression:

The main feature of a depression is a general fall in economic activity. Production, employment and income decline. The prices fall and the main factor responsible for it is, a fall in the purchasing power.

The distribution of national income changes. As the costs are rigid in nature, the margin of profit declines. Machines are not used to their full capacity in factories, because effective demand is much less. The prices of finished goods fall less than the prices of raw materials.

✳Reality Tips to Traders

1)Trading in the stock market is a marathon. 2)Protecting your capital is key. (Learn to protect first) 3)Making 0 on the day is better than losing 50k 4)Losses happen; they are part of this business. 5)It’s not you vs. the market. It’s you VS you. 6)You are your biggest enemy; learn to be mentally disciplined. 7)Don’t follow the majority; follow the correct path. 8)Traders without a stop loss end up not being traders for long. 9)There is always another trade. 10)The big money is made waiting for the right set-ups. 11)Waiting for the right trade is the most powerful strategy. 12)It is better to cut a loss than to wait to be proven right. 13)Position sizing can make or break you. 14)Worry about the downside before you even think about the upside. 15)Don’t listen to headlines

..BANKING TERMINOLOGY

There are various types of Banks: PSU Banks, Private Banks, Co-operative/Regional Banks, Small Finance Banks and Foreign Banks. When you deposit money in a bank, let's say the bank gives you an interest rate of 4%. But when the bank lends out this money, they lend it out at say, 12%. The difference of 8% in the above scenario is effectively the profit of the bank! The loans that do not pay interest for 90 days are known as Non-performing Assets. Banks have to provide for such bad loans. Structure of a Bank Asset for a Bank: The asset portion of a bank's capital includes cash, government securities, and interest-earning loans (e.g., mortgages, letters of credit, and inter-bank loans). Liabilities for a Bank: The bank's main liabilities are its capital (including cash reserves and, often, subordinated debt) and deposits. The latter may be from domestic or foreign sources (corporations and firms, private individuals, other banks, and even governments). Banks are required to maintain Liquidity with the Reserve Bank of India: SLR (Statutory Liquidity Ratio): It is the money a bank needs to preserve in the form of cash, gold or government Bonds before providing credit customers. This limitation is added by RBI on banks to make funds available to customers on-demand at your earliest convenience. Banks are required to maintain SLR at 18%. CRR (Cash Reserve Ratio): Banks are required to hold a certain proportion of their deposits in the form of cash. Banks don’t hold these as cash with themselves, but deposit such amounts with RBI / currency chests. CRR rate is at 4.5% currently. Repo Rate: The rate at which the RBI lends short-term money to the banks. The RBI through its Monetary Policy committee changes the repo rate to balance growth and Inflation. Reverse Repo rate: The rate at which banks park their short-term excess liquidity with the RBI. Now let us understand various terminologies for Banks Net Interest Income (NII): This is the spread the bank makes on its lending. It is calculated as Interest Income – Interest Expended Net Interest Margin (NIM): This is the spread the bank makes on its lending. It is the earning which is left after deducting the cost paid to depositors from its yields on Loans. This is denoted in % terms. The formula is Yield on Loans – Cost of funds Capital Adequacy Ratio (CAR): The capital adequacy ratio (CAR) is a measure of a bank's available capital expressed as a percentage of a bank's risk-weighted credit exposures. Essentially, it is the Capital that is available to lend. Tier I Capital – In simple words this capital is freely available with the bank to lend out. Tier II Capital- This is the capital tied up somewhere and is less freely available to lend. In case of an adverse event, the bank can use this capital to lend. Under Basel III norms, a bank’s tier 1+tier 2 capital must be a minimum of 8% of its risk-weighted holdings. The minimum capital adequacy ratio, also including the capital conservation buffer, is 10.5%. Current Account Saving Account (CASA)- There is no interest paid on the Current Account and a small interest rate is paid on a savings account. The combination of both is called CASA which shows the liabilities of the bank on which it pays relatively less interest. Deposits: Bank deposits are a savings product that customers can use to hold an amount of money at a bank for a specified length of time. In return, the financial institution will pay the customer the relevant amount of interest, based on how much they choose to deposit and for how long. Now let us come to NPA. Gross NPA (GNPA): It is the total loans on which no payment has been paid for 90 days or more. GNPA % is usually shown in each Bank’s quarterly results. The percentage is basically the GNPA amount as a % of the total advances. Slippages: Slippages denote the fresh amount of loans that have turned bad in a year. The slippage ratio of a bank is calculated as Fresh accretion of NPAs during the year /Total standard assets at the beginning of the year multiplied by 100. Provisioning Coverage Ratio (PCR): This is the ratio of provisioning to GNPA and indicates the extent of funds a bank has kept aside to cover loan losses. For Instance, a company has GNPAs of Rs 100 and they have set aside 50 Rs, then the PCR is 50%. Net NPA (NNPA): The total figure left after deducting provisions made for bad loans from GNPA. (GNPA – Provisions+upgrades/writeoffs = NNPA) Special Mention Account (SMA) SMA-0 is a category in which stress with respect to the principal and interest has remained overdue for a period of 0 to 30 days. SMA-1 is a category in which stress with respect to the principal and interest has remained overdue for a period of 30-60 days. SMA-2 is a category in which stress with respect to the principal and interest has remained overdue for a period of 60-90 days

..... . VALI disclosures . .....

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Friday, October 30, 2026

30/10/26, Godrej Consumer Products

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