1. 🧠 At a Glance
Godrej Consumer Products Ltd (GCPL) owns iconic brands like GoodKnight, HIT, Cinthol, and Godrej No.1. But lately, its financials feel more like “No. Zero.” Despite a 69x P/E, the company is barely crawling on revenue and profit growth, while ROE and promoter holding are in slow decline. Fancy soap, mid soap opera.
2. 🎬 Introduction with Hook
When your mosquito repellent brand is called GoodKnight, you better not apply that logic to your stock price.
Godrej CP is a ₹1.3 lakh crore FMCG behemoth… but here’s the plot twist:
- 10 brands bring in 70% of revenue,
- Yet revenue growth is just 2% YoY,
- And promoters quietly sold 10% stake in 3 years. 👀
At a 69x P/E, we expected sexier numbers.
3. 🏭 Business Model (WTF Do They Even Do?)
Godrej CP operates across Household and Personal Care segments in India, Africa, Indonesia, and Latin America. Key categories:
| Segment | Brands | What It Sells |
|---|---|---|
| Home Care | GoodKnight, HIT, Aer | Mosquito repellents, pest control, air fresheners |
| Personal Care | Cinthol, No.1, Expert | Soaps, hair color, grooming |
| Others | Stella, Mitu, Darling | Babycare, hair extensions, air care |
Their Africa hair business (Darling) once excited the Street. But now it’s just that uncle who peaked at 35.
4. 💰 Financials Overview – Profit, Margins, ROE, Growth
Let’s break the bubbles:
| Metric | FY21 | FY22 | FY23 | FY24 | FY25 |
|---|---|---|---|---|---|
| Revenue (₹ Cr) | 11,029 | 12,276 | 13,316 | 14,096 | 14,364 |
| Net Profit (₹ Cr) | 1,721 | 1,783 | 1,702 | -561 | 1,852 |
| ROE (%) | 16.8 | 17.4 | 16.6 | -5.5 | 18.1 |
| OPM (%) | 22 | 20 | 18 | 21 | 21 |
| EPS (₹) | 16.83 | 17.44 | 16.65 | -5.48 | 18.11 |
😬 That FY24 loss? A one-off – due to ₹2,312 Cr negative “other income” (we’ll get to that).
5. 📊 Valuation – Is It Cheap, Meh, or Crack?
🧠 P/E: 69x.
💸 P/B: 11x.
📉 Sales CAGR: 5-Year: 8%, TTM: 2%.
🪞 ROE (3Y Avg): -10%.
You’re paying luxury-soap prices… for sub-bar soap growth. It’s less “HIT” and more “missed opportunity.”
6. 🍿 What’s Cooking – News, Triggers, Drama
- 🏭 New factory in Tamil Nadu went live in FY25.
- 🐶 Entered pet care business in 2024. (Feeding dogs since growth from humans was slow?)
- 👨👩👧 Family settlement drama — promoter reshuffle led to classification change from “promoter” to “public.”
- 💰 Raised dividend payout to 110% in FY25 — is this generosity… or guilt?
7. 🏗️ Balance Sheet – How Much Debt, How Many Dreams?
| Year | Borrowings (₹ Cr) | Reserves (₹ Cr) | Networth (₹ Cr) |
|---|---|---|---|
| FY21 | 1,864 | 9,337 | 9,439 |
| FY24 | 3,222 | 12,496 | 12,598 |
| FY25 | 4,004 | 11,902 | 12,004 |
Borrowings almost 2.2x in 4 years. Networth? Flat. Maybe the soap got too slippery.
8. 💵 Cash Flow – Sab Number Game Hai
| Year | CFO (₹ Cr) | Capex | FCF |
|---|---|---|---|
| FY24 | 2,070 | -3,435 | 🔴 -1,365 Cr |
| FY25 | 2,577 | -344 | 🟢 +2,233 Cr |
They’ve cleaned up after FY24’s messy capex party. FY25 shows free cash returning. But the hangover is still visible in ROE.
9. 📐 Ratios – Sexy or Stressy?
| Metric | FY23 | FY24 | FY25 |
|---|---|---|---|
| ROCE | 17% | 19% | 19% |
| Working Capital Days | 22 | 23 | 97 😱 |
| Cash Conversion Cycle | 19 | 16 | 6 ✅ |
| Debt/Equity | 0.09 | 0.26 | 0.33 ⚠️ |
Working Capital Days shot up 4x. Why? Inventory + receivables ballooned post FY24 plant commissioning.
10. 💸 P&L Breakdown – Show Me the Money
| Line Item | FY25 (₹ Cr) |
|---|---|
| Sales | 14,364 |
| Operating Profit | 3,003 |
| Other Income | 253 |
| Interest | 350 |
| Depreciation | 234 |
| PBT | 2,672 |
| Net Profit | 1,852 |
After a freak loss in FY24, things seem back on track — but the real question is sustainability.
11. ⚔️ Peer Comparison – Who Else in the Game?
| Company | P/E | ROE (%) | OPM (%) | 5Y Sales CAGR | Promoter Holding |
|---|---|---|---|---|---|
| Godrej CP | 69x | 15.4 | 21 | 8% | 53% |
| Dabur | 54x | 16.7 | 18 | 9% | 67% |
| Colgate | 45x | 81.2 | 32 | 5% | 51% |
| Emami | 32x | 31.2 | 26 | 8% | 53% |
| Honasa (Mamaearth) | 149x | 5.5 | 2.9 | 20% | 35% |
Godrej CP is somewhere in between — not the worst, but certainly not delivering like the premium P/E suggests.
12. 🧾 Miscellaneous – Shareholding, Promoters
- Promoter holding fell from 63.2% to 53% in 3 years.
- FIIs too are trimming — from 24% to 19.5%.
- Shareholder count has risen to 2.35 lakh — the retail junta is still hopeful. 🙃
- Dividend payout hit 110% in FY25 (from 0% two years ago). Clearly, trying to keep investors from swiping left.
13. 🧑⚖️ EduInvesting Verdict™
🚿 Godrej CP is like that soap you used as a kid — nostalgic, still smells nice… but not exactly exciting anymore.
The brands are strong, the margins are okay-ish, but growth? Meh.
They’re spending on factories and pet care, while ROE and debt metrics quietly worsen.
🎯 Fair Value Range (EduInvesting POV)
₹950 – ₹1,100 per share
(Assuming 40–45x normalized earnings of ₹25 by FY27, with modest 8–10% profit growth)
📌 Tags: Godrej CP stock analysis, FMCG stock India, Godrej Consumer valuation, GoodKnight HIT soap share, Godrej stock fair value, EduInvesting FMCG, P/E too high stocks
✍️ Written by Prashant | 📅 12 July 2025
