Thursday, 20 November 2008

Buy Godrej Consumer: Motilal Oswal

Motilal Oswal has maintained its buy rating on Godrej Consumer Products in its November 19, 2008 research report. "GCPL is expected to report strong margin expansion in Toilet Soaps and improved volumes in Hair Color in FY10. Stabilization of Kinky will be a key contributor to increased profits of its international business in FY10. Improved margins will result in PAT growth accelerating to 31% in FY10 versus just 2% in FY09. Promoters have started exercising the creeping acquisition route, as the limits for such acquisition has been relaxed to 75%; GCPL is also considering buyback of shares from the open market. The stock is trading at 16x FY09E EPS of Rs 7.1 and 12.2x FY10E EPS of Rs 9.3 and has a dividend yield of 3.5%. Maintain Buy," says Motilal Oswal's research report.

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Source: Moneycontrol

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