Recommendation : BUY
December 29, 2010
Debt/Equity of Godrej Consumer Products Limited as of now has increased to 1.24 vs 0.68 as in March 2010 quarter on account of increased debts due to increased Goodwill on Consolidation. Reserves and Surplus have increased by 69% at 1560.83 crores in the September quarter from 923.87 crores in the March quarter this year. Capital Employed has increased by 94% to 1201.6 crores in September quarter from 619.28 crores in March quarter.
Income from Operations have increased by 67% to 964.73 crores in the September quarter from 577.92 crores in the corresponding quarter last year. Operating Profit Margins are similar to that of last year at 19% in this quarter, despite rise in cost of raw materials. The breakdown of Quarterly Financial Statements is given below.
If we compare things annually, Income from Operations in 2010 increased 46% to 2043.68 crores from 1396.63 crores crores in 2009. Operating Profit Margins for whole year ending March 2010 was 18% as compared to 16% for the year ending March 2009. Remarkably, they had lesser pressure on the raw materials front for the financial year 2009-10. The breakdown of Annual Financial Statements is given below.
Return over Capital Employed (ROCE) for the current year ending six months is coming out to be 25% as compared to an ROCE of 60% in the whole financial year of 2009-10, indicating huge increase in Fixed Assets and Working Capital.
Cash Conversion Cycle (CCC) for the current year ending six months is coming out to be -40 days as compared to -57 days for the whole financial year ending March 2010, which is excellent.
Total Assets per Share of the company is coming out to be Rs. 110.31. Earning per Share of the company for the past four quarters is coming out to be Rs. 13.59. Current Price of the scrip is Rs. 380.30. Trailing P/E of the company is coming out to be 27.98.
Equity Section notes that Godrej Consumer Products Limited has been able to handle the pressure of increased raw material prices quiet efficiently, and also, they have been quiet busy acquiring leading brands all around the globe and consolidating them. Equity Section believes that the acquisitions in Latin America and Africa are growth-intensive and will provide the future growth potential for the company. Their recent acquisition in Indonesia is a strong brand and will continue to perform excellently. Also, MENA region can also surprise them on the positive side. Therefore, Equity Section issues a BUY rating on Godrej Consumer Products Limited.
Discalimer : Equity Section doesn't hold this scrip.
No comments:
Post a Comment