GODREJCP - Investment Analysis: Buy Signal or Bull Trap?
Back to ListInvestment Rating: 3.6
| Stock Code | GODREJCP | Market Cap | 1,18,278 Cr. | Current Price | 1,155 ₹ | High / Low | 1,309 ₹ |
| Stock P/E | 84.7 | Book Value | 78.8 ₹ | Dividend Yield | 1.73 % | ROCE | 19.3 % |
| ROE | 14.9 % | Face Value | 1.00 ₹ | DMA 50 | 1,189 ₹ | DMA 200 | 1,191 ₹ |
| Chg in FII Hold | -2.82 % | Chg in DII Hold | 2.91 % | PAT Qtr | 431 Cr. | PAT Prev Qtr | 356 Cr. |
| RSI | 38.4 | MACD | -13.1 | Volume | 26,40,744 | Avg Vol 1Wk | 18,81,412 |
| Low price | 980 ₹ | High price | 1,309 ₹ | PEG Ratio | -39.2 | Debt to equity | 0.33 |
| 52w Index | 53.3 % | Qtr Profit Var | 26.1 % | EPS | 13.1 ₹ | Industry PE | 46.7 |
📊 Analysis: Godrej Consumer Products (GodrejCP) trades at a premium valuation with a P/E of 84.7 compared to the industry PE of 46.7. ROCE (19.3%) and ROE (14.9%) are moderate, showing decent efficiency but not exceptional. EPS of 13.1 ₹ is relatively low for its valuation, and the PEG ratio (-39.2) highlights weak growth visibility. Dividend yield of 1.73% provides modest income. Debt-to-equity at 0.33 is manageable but higher than ideal. Quarterly PAT growth (431 Cr. vs 356 Cr.) shows strong momentum with a 26.1% variation. Technicals indicate weakness with RSI at 38.4 and MACD negative (-13.1), suggesting bearish sentiment.
💰 Entry Price Zone: Ideal accumulation range is 1,050 ₹ – 1,100 ₹, closer to support levels and below DMA averages for margin of safety. Current price (1,155 ₹) is slightly above this zone, so staggered buying is advisable.
📈 Exit / Holding Strategy: For existing holders, maintain positions with a medium-term horizon (2–3 years). Partial profit booking can be considered near 1,280 ₹ – 1,300 ₹ (recent highs). Long-term holding beyond 3 years requires improvement in ROE/ROCE and earnings growth. Dividend yield provides modest income, but focus remains on capital appreciation.
✅ Positive
- Moderate ROCE (19.3%) and ROE (14.9%)
- Dividend yield of 1.73% provides steady income
- Quarterly PAT growth of 26.1% YoY
- DII holdings increased (+2.91%)
⚠️ Limitation
- High P/E of 84.7 vs industry PE of 46.7
- PEG ratio (-39.2) indicates poor growth visibility
- EPS of 13.1 ₹ is modest relative to valuation
- Debt-to-equity ratio of 0.33 is higher than ideal
📉 Company Negative News
- Decline in FII holdings (-2.82%)
- Weak technical indicators (RSI and MACD)
- Stock consolidating below DMA 50 and DMA 200
📈 Company Positive News
- Quarterly profit growth from 356 Cr. to 431 Cr.
- DII confidence increased (+2.91%)
- Strong consumer demand supports revenue growth
🏭 Industry
- FMCG sector enjoys steady demand and resilience
- Industry PE at 46.7 highlights investor optimism
- Consumer staples remain defensive plays in volatile markets
🔎 Conclusion
GodrejCP is a fundamentally stable FMCG stock with moderate efficiency ratios and steady profit growth. However, valuations are stretched, and growth visibility is weak. Ideal strategy: accumulate near 1,050–1,100 ₹, hold for 2–3 years, and book partial profits near highs (1,280–1,300 ₹). Long-term compounding potential depends on improvement in profitability and earnings growth.