Godrej Consumer (GODREJCP)

FairStock Score: 62/100 — STEADY

Score breakdown: P/E: 0/3 · ROCE: 1/2 · Growth: 1/2 · Dividend: 0/1

Key Financials

Strengths

• Strong promoter alignment with 53.06% holding
• Sound financial health: debt/equity 0.34, Altman Z 5.79, Piotroski F-score 8/9
• Robust free cash flow of ₹2,234 crore
• Respectable profitability: ROE 15.18%, ROCE 19.21%
• Latest quarter shows steady scale: sales ₹4,099 crore, net profit ₹498 crore

Concerns

• Extremely expensive valuation: P/E 64.13, P/B 9.74, EV/EBITDA 143.24
• Price far above Graham Number ₹216.78 and DCF value ₹467.12, leaving negative margin of safety
• Slow 5-year revenue CAGR of 5.43% does not justify the premium multiple
• Stated PEG of 0.57 is inconsistent with actual profit growth of 11.97%, so it should not be relied upon

AI Analysis

Godrej Consumer is a decent business, but the price tests my patience. At ₹1,142.45, the market cap is ₹1.25 lakh crore. Graham would say: first measure the business, then the price. The business has qualities I respect: trusted personal care brands, a promoter holding of 53.06%, and a sound balance sheet—debt/equity is just 0.34, Altman Z is 5.79, Piotroski F-score is 8/9, and free cash flow is ₹2,234 crore. Returns on capital are respectable: ROCE 19.21%, ROE 15.18%. Latest quarter sales ₹4,099 crore and net profit ₹498 crore show steady execution. Profit growth of 11.97% is ahead of sales growth of 7.29%, which indicates some margin discipline. But here is the problem: valuation. A P/E of 64.13 and P/B of 9.74 are rich. EV/EBITDA at 143.24 is extreme. The Graham Number is ₹216.78; even the DCF value of ₹467.12 is far below the market price. That gives no margin of safety—rather, it is dangerously overvalued. The five-year revenue CAGR is only 5.43%, so this is not a fast grower. The quoted PEG of 0.57 does not reconcile with 11.97% profit growth, so I give it little weight. The FairStock Score of 56/100 labels it Steady, and I agree. For a retail investor, buying here means hoping the future becomes exceptional. Buffett's rule: be fearful when others are greedy. I'd rather miss a good company at a foolish price than overpay. Godrej Consumer is a stalwart franchise, but at this price I would wait, monitor volume growth, and demand a better entry point.

Data from BSE/NSE filings. AI analysis is for educational purposes only — not investment advice. Scoring methodology · Disclaimer