Godrej Consumer Products shares gained 2.05% to ₹854.15 on Tuesday following the company's strong Q2FY27 growth projections, with the stock trading at ₹854.15, up 2.05% at 10:46 am on the NSE. This positive market reaction comes after the company announced on Monday (October 5) that it expects consolidated revenue growth in the high teens for Q2FY27, with underlying volume growth in the high single digits and EBITDA growth in double digits. The stock had touched a 52-week low of ₹832.60 on Monday before recovering, with Tuesday's intraday high standing at ₹862.35. Buy orders accounted for 57.71% of total traded quantity against 42.29% sell orders, indicating strong institutional interest despite the stock's longer-term challenges.
The company faced significant commodity inflation during Q2, with input cost pressures intensifying particularly across crude-linked derivatives, palm oils and other commodities. As per the company's latest filing, palm oil and crude-linked input costs rising sharply, creating pressure on margins and prompting calibrated pricing actions, cost savings, supply-chain efficiencies and disciplined cost management. The company noted that while certain commodities had shown signs of moderation towards the end of Q1 FY27, Q2 witnessed renewed inflation across several key raw-material baskets. Nuvama Research expects consolidated gross margin to fall 470 basis points Y-o-Y to 47.4%, while EBITDA margin is likely to decrease 130 basis points Y-o-Y to 17.9% due to inventory correction actions. Nomura Research expects consolidated operating profit margins to be stable Q-o-Q but moderate on a Y-o-Y basis to 19% (-80 basis points Y-o-Y), though it anticipates 12.5% Y-o-Y growth in EBITDA.
For its standalone business, Godrej Consumer expects revenue growth in the teens and high-single-digit underlying volume growth, despite facing an estimated 100–150 basis point impact from trade inventory correction. The company's India business recorded an 11% year-on-year increase in revenue to ₹2,557 crore in Q1 FY27, as reported in the latest results. Nuvama Research expects the domestic business revenue to grow 12% Y-o-Y, while volumes would rise by 8% Y-o-Y, compared to 3% Y-o-Y growth in Q2FY26. India sales growth is expected at around 13%, with volume growth at 7%, despite the inventory correction. Pricing growth increased to 6% in Q2 from 4.5% in Q1, with growth supported by its Personal Care and Home Care portfolios. Nomura Research expects the domestic business to deliver 12% Y-o-Y revenue growth, with the company remaining firmly on track to deliver its fiscal 2027 guidance despite the challenging operating environment.
The Indonesia business is expected to report revenue growth in the high teens, supported by high-single-digit volume growth. According to the company, this performance is attributed to improved execution, sustained market share momentum and healthy category trends. In the Indonesian market, which accounts for 12% of consolidated revenues and is the single-largest overseas market for GCPL, the company is consolidating on the recovery witnessed in the last few quarters. The company expects the business to deliver high-teens revenue growth on a base of -7%, supported by high-single-digit volume growth, compared to year-ago growth of 2%. The GAUM business is expected to deliver double-digit revenue and volume growth, with Nomura Research expecting GAUM growth at 15% in constant currency and over 30% including currency benefits. The Africa, US and Middle East businesses are expected to report robust double-digit revenue and volume growth. We remain firmly on track to deliver our guidance for the full year with the confidence to exceed the same in select areas through a broad-based performance across businesses.
Analyst reactions were mixed following the Q2 update, with Goldman Sachs maintaining a Buy with a target of ₹1,030, calling it a strong quarter. However, JM Financial retained its Buy but cut its target sharply to ₹985 from ₹1,215, citing concerns around the leadership transition following the resignation of CEO Sudhir Sitapati. HSBC held its Hold rating at ₹990, flagging rising cost inflation as a key risk. CLSA remained the most cautious with an Underperform rating and a target of ₹743. Nuvama Research has a buy rating on the stock with a target price of ₹1,485, while Nomura Research expects it to step up investments in new brands/launches, which should aid better revenue growth over the medium term, though higher investments could limit EBITDA growth to early double digits. The stock's P/E stands at 44.76 and total market capitalisation stands at ₹87,405.59 crore. Despite the positive Q2 outlook, the stock remains down 31.31% year-to-date and 25.57% over the past year, against a 52-week high of ₹1,273.90 touched in January 2026.
