Godrej Consumer shares are up as UBS increases its target price by about twenty percent

Godrej Consumer shares: In morning trading on April 25, shares of Godrej Consumer Products Limited rose more than 1 percent to reach Rs 1,225, following an uptick in UBS’s target price. The increase in target price was attributed to the potential revenue boost from new products.

The international brokerage, sticking with its ‘buy’ stance, upped the target price to Rs 1,450 from Rs 1,200. This adjustment suggests a 19.5 percent potential gain from the previous close of Rs 1,213.

UBS stated in a report, “We anticipate robust sales expansion in the company’s domestic home insecticide (HI) business, while the liquid detergent sector offers substantial growth prospects.” The brokerage further mentioned that the HI segment is poised to gain from exclusive rights to a new molecule until FY32.

Godrej Consumer

In February, the company introduced Goodknight Agarbatti, which marks India’s inaugural legal anti-mosquito incense sticks. These sticks incorporate a pioneering molecule known as Renofluthrin (RNF), with GCPL collaborating exclusively with a manufacturer to develop it for their products. According to GCPL, RNF is purportedly twice as effective as other commonly used molecules in home insecticides (HI) in India.

Analysts foresee that GCPL’s exclusive access to RNF, coupled with its strong distribution network, will empower the company to seize a greater portion of the market in the anti-mosquito incense sticks segment.

The segment contributes to roughly 30-40 percent of GCPL’s overall revenues. Over the past three years, the company has witnessed a compound annual growth rate (CAGR) of 10 percent in sales, while profit growth has been comparatively sluggish, registering a CAGR of only 3 percent during the same timeframe.

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Since the beginning of the year, GCPL shares have surged by more than 7 percent.