Quantamental Equity Research on GODREJ CONSUMER PRODUCTS LTD

Quantamental Equity Research on GODREJ CONSUMER PRODUCTS LTD | Release: 30 Apr 2020 16:06:55 UTC+05:30 | Reporting Currency: INR | Trading Currency: INR | Exchange:NSE/BSE NSE CODE:GODREJCP and BSE CODE:532424
Last Close:  INR 536.45
Fair Value:  INR 167
Est. Price by Mar 20:  INR 693.05
Market Capitalization (INR Crs):  54842.16
Industry:  Personal Products
Rating:  STRONG BUY
Upside:  29%
Company Profile
Godrej Consumer Products is engaged in a fast moving consumer goods Company, manufacturing and marketing Household and Personal Care products.(Source : 201903 Annual Report Page No: 195)
Compounded Annual Growth   
Particulars 1-Year 3-Year 5-Year 10-Year
Revenue % 5% 7% 6% 18%
EBIT % 5% 22% 15% 18%
Earnings % 43% 41% 25% 21%
Book Value %  16% 19% 14% 23%
Stock Total Return %  -6% 14% 19% 23%
Share holding pattern
Particulars %age   
(A) Promoter & Promoter Group 63.24  
(B) FII/FPI 27.74  
(C) DII/Insurance Companies 2.22  
(D) Public holding < 2 lakhs of cap. 5.03  
(E) Others 1.77  
Grand Total 100.00  
Fundamentals (Historical and Estimated)
Particulars Mar-11 Mar-12 Mar-13 Mar-14 Mar-15 Mar-16 Mar-17 Mar-18 Mar-19  Mar-20 E   Mar-21 E   Mar-22 E   Mar-23 E   Mar-24 E 
Price 122 160 259 286 347 460 557 729 686 693 720 760 815 879
Return on Equity 30% 26% 24% 20% 21% 19% 25% 26% 32% 17% 17% 16% 16% 16%
Price to Earning  23.8 22.5 33.3 38.5 39.1 56.8 43.7 45.6 29.9 50.9 50.9 50.9 50.9 50.9
EVTI 3.8 3.6 4.4 4.1 4.5 6.1 6.4 7.6 6.8 6.9 7.1 7.3 7.4 7.5
EVTIFM 23.8 22.5 33.3 38.5 39.1 56.8 43.7 45.6 29.9 50.9 50.9 50.9 50.9 50.9
Price to Book Value 7.1 5.8 8.0 7.8 8.2 11.0 10.7 11.9 9.6 8.9 8.4 8.2 8.1 8.0
Debt to Equity  1.2 0.7 0.7 0.6 0.6 0.7 0.8 0.6 0.5 0.3 0.2 0.1 0.0 0.0
Dividend Yield 1% 1% 1% 1% 1% 0% 1% 1% 2% 1% 1% 1% 1% 1%
Cash Flow to Firm -35% 1% 1% 6% 3% 6% 2% 3% 1% 3% 3% 3% 3% 3%
Detailed Estimates
Title Mar-19 Mar-20 E Mar-21 E Mar-22 E Mar-23 E Mar-24 E  
Sales     10,314.34     10,176.90     10,202.40     10,389.49     10,744.48     11,281.71  
EBITDA       2,493.52       2,260.55       2,266.22       2,307.77       2,386.63       2,505.96  
EBIT       2,323.54       2,092.84       2,101.73       2,146.45       2,228.40       2,350.78  
PBT       2,085.33       1,854.63       1,926.51       2,034.41       2,180.60       2,350.78  
NPAT       2,341.53       1,390.97       1,444.88       1,525.80       1,635.45       1,763.08  
Price to Earning             29.95            50.93            50.93            50.93            50.93            50.93  
Price to Book Value              9.65              8.88              8.45              8.19              8.07              8.01  
Debt to Equity               0.47              0.31              0.18              0.07                  -                    -    
Return on Equity              0.32              0.17              0.17              0.16              0.16              0.16  
Enterprise Value to Total Income (EVTI)              6.83              6.92              7.08              7.25              7.43              7.55  
Enterprise Value to Total Income to Firm Margin(EVTIFM)            32.74            59.33            60.58            61.87            63.14            63.86  
Price or Est. Share Prices          686.00          693.05          719.95          760.30          814.95          878.60  
DISCOUNTED CASH FLOW
Title Mar-20 E Mar-21 E Mar-22 E Mar-23 E Mar-24 E  
PBT       1,854.63       1,926.51       2,034.41       2,180.60       2,350.78  
Interest          238.21          175.21          112.04            47.81                  -    
Depreciation          167.71          164.49          161.33          158.23          155.18  
Cash Flow Before Tax       2,260.55       2,266.22       2,307.77       2,386.63       2,505.96  
Tax Rate            25.00            25.00            25.00            25.00            25.00  
Cash Flow After Tax       1,695.41       1,699.66       1,730.83       1,789.97       1,879.47  
Terminal Cash Flow                                                                                      -       21,733.07  
Total Cash Flow       1,695.41       1,699.66       1,730.83       1,789.97     23,612.54  
Present Value of Cash Flow (Mar-20 E)     19,558.31  
Debt (Mar-20 E)       2,487.66  
Value of Equity (Mar-20 E)     17,070.65  
Fair Value Per Share (Mar-20 E)          167.00  
Equity          54,842
Debt            3,382
Beta Take from Reuters 0.58
Risk Free Rate Prevailing Yield in India 7%
Market Risk Premium Assuming 8.82% premium for Equity Investments 7%
Interest Paid               238
Tax Benefit                -29
Interest Net of Tax               267
Debt            3,382
Cost of Debt 8%
Cost of Equity 12%
Debt Weight 6%
Equity Weight 94%
WACC 11%
Cash Flow of Mar-24 E       1,879.47
Growth 2.1%
Present Value of Terminal Cashflow     21,733.07
Peer Comparision
# Name CMP Rs. Mar Cap Rs.Cr. Debt Rs.Cr. Cost of Equity % Kd before tax % WACC % Beta P/E Ann. ROE % CMP / BV PE/ROE PE/ROE/G
   1  Dabur India           478.25          84,510          697.48            23.55              6.53            23.40              1.39            51.28            32.32            13.74              1.59            12.07
   2  Godrej Consumer           536.45          54,842       2,581.35            17.06              7.01            16.65              0.58            24.77            28.44              7.23              0.87            11.93
   3  Marico           289.65          37,395          359.00            19.41            13.41            19.33              0.87            30.11            37.52            10.58              0.80              7.59
   4  Emami           195.90            8,893          278.25            16.75              8.21            16.43              0.57            26.28            39.48              4.60              0.67            57.38
   5  Jyothy Labs           114.00            4,186          274.39            14.22              8.43            13.80              0.21            19.60            17.81              3.25              1.10             -9.56
   6  Bajaj Consumer           146.15            2,156            68.61            13.25              9.38            13.07             -0.37              9.74            40.26              3.72              0.24             -1.36

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