GODFRYPHLP - Investment Analysis: Buy Signal or Bull Trap?
Back to ListInvestment Rating: 4.3
| Stock Code | GODFRYPHLP | Market Cap | 31,872 Cr. | Current Price | 2,043 ₹ | High / Low | 3,947 ₹ |
| Stock P/E | 24.9 | Book Value | 306 ₹ | Dividend Yield | 1.55 % | ROCE | 29.4 % |
| ROE | 22.2 % | Face Value | 2.00 ₹ | DMA 50 | 2,408 ₹ | DMA 200 | 2,682 ₹ |
| Chg in FII Hold | 0.21 % | Chg in DII Hold | 0.09 % | PAT Qtr | 354 Cr. | PAT Prev Qtr | 304 Cr. |
| RSI | 37.8 | MACD | -143 | Volume | 3,21,899 | Avg Vol 1Wk | 3,83,220 |
| Low price | 1,507 ₹ | High price | 3,947 ₹ | PEG Ratio | 0.70 | Debt to equity | 0.04 |
| 52w Index | 21.9 % | Qtr Profit Var | 5.95 % | EPS | 81.0 ₹ | Industry PE | 20.8 |
📊 Analysis: Godfrey Phillips shows strong fundamentals with ROCE at 29.4% and ROE at 22.2%, reflecting efficient capital utilization. The company is nearly debt-free (0.04 debt-to-equity), ensuring financial stability. EPS of 81 ₹ supports earnings strength, and quarterly PAT growth (354 Cr. vs 304 Cr.) indicates steady performance. Valuation-wise, P/E of 24.9 is slightly above industry PE (20.8), but the PEG ratio of 0.70 suggests fair valuation relative to growth. Dividend yield of 1.55% provides moderate income. Technicals show weakness with RSI at 37.8 and MACD negative (-143), indicating bearish momentum and consolidation below DMA 50 (2,408 ₹) and DMA 200 (2,682 ₹).
💰 Entry Price Zone: Ideal accumulation range is 1,900 ₹ – 2,000 ₹, close to support levels and below DMA averages for margin of safety. Current price (2,043 ₹) is near this zone, making staggered buying suitable for long-term investors.
📈 Exit / Holding Strategy: For existing holders, maintain positions with a long-term horizon (3–5 years) given strong efficiency ratios and dividend yield. Partial profit booking can be considered near 3,800 ₹ – 3,950 ₹ (recent highs). Dividend yield provides steady income, making it suitable for a hold strategy in a diversified portfolio.
✅ Positive
- Strong ROCE (29.4%) and ROE (22.2%)
- Debt-light balance sheet (0.04 debt-to-equity)
- EPS of 81 ₹ supports valuation strength
- Dividend yield of 1.55% provides moderate income
- Quarterly PAT growth of 5.95% YoY
⚠️ Limitation
- P/E of 24.9 is slightly above industry PE (20.8)
- RSI at 37.8 indicates oversold conditions
- MACD negative (-143), showing weak momentum
- Stock consolidating below DMA 50 and DMA 200
📉 Company Negative News
- Weak technical indicators (RSI and MACD)
- Stock trading significantly below 52-week high (3,947 ₹)
📈 Company Positive News
- Quarterly profit growth from 304 Cr. to 354 Cr.
- FII holdings increased (+0.21%)
- DII holdings increased (+0.09%)
🏭 Industry
- Tobacco and FMCG sector enjoys steady demand
- Industry PE at 20.8 highlights moderate valuation levels
- Sector rotation favors consumer staples in defensive cycles
🔎 Conclusion
Godfrey Phillips is a fundamentally strong, debt-light FMCG stock with efficient capital utilization and steady profit growth. While technicals show weakness and valuations are slightly premium, long-term prospects remain attractive. Ideal strategy: accumulate near 1,900–2,000 ₹, hold for 3–5 years, and book partial profits near highs (3,800–3,950 ₹). Best suited for investors seeking a mix of capital appreciation and moderate dividend income.