Godrej Consumer shares plunge nearly 5% to multi-year low

Godrej Consumer Products shares tumbled as much as 5 percent on Thursday, hitting their lowest level in nearly four years. The stock traded around Rs 869 in early afternoon deals, down about 4 percent, taking its year-to-date losses to roughly 30 percent against an 8.5 percent decline in the Nifty 50. Market capitalisation stood above Rs 89,200 crore. The sharp sell-off followed an analyst meet where new Managing Director and CEO Aasif Malbari outlined a transformation strategy. Investors focused on near-term headwinds, including a planned inventory correction in the general trade channel. The company aims to cut inventory days to 10 from about 20, involving Rs 125-150 crore of stock over the next three quarters. This is expected to weigh on reported India growth. Higher investments of around Rs 200 crore annually in R&D, go-to-market capabilities and marketing, alongside elevated input costs, added to concerns. Brokerages reacted cautiously: CLSA upgraded to ‘underperform’ but cut its target to Rs 743, while Morgan Stanley retained equal-weight with a Rs 1,204 target and Nomura kept a buy rating at Rs 1,100. Despite the pressure, Godrej Consumer reiterated FY27 targets of high-single-digit India volume growth and double-digit consolidated revenue and EBITDA growth. Malbari’s longer-term plan centres on revitalising core categories, expanding into new areas via G-Lab, and embedding AI in forecasting and pricing.