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Godrej Cons FY11 revenue to rise 86% after Sara Lee buy

Godrej Cons FY11 revenue to rise 86% after Sara Lee buy
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First Published: Thu, May 13 2010. 03 05 PM IST
Updated: Thu, May 13 2010. 03 05 PM IST
Mumbai: Personal products maker Godrej Consumer Products Ltd said its revenues would rise 86% in FY11 following the buyout of its 51% stake in Godrej-Sara Lee from Sara Lee Corp.
“This makes us one of the strogest performers in the home and personal care space in India..After the Sara Lee buyout and the recent acquisitions our topline will now touch Rs3,800 crores,” Dalip Sehgal, managing director, told Reuters on Thursday.
Godrej Consumer, which reported consolidated net sales of Rs204 crore on net profit of Rs340 crore in FY10, sees the buy to push its FY11 revenues to Rs3,800 crore.
US-based Sara Lee late on Wednesday said it would sell 51% to Godrej for $233.7 million. The firm was sold at a 15 times multiple of FY10 earnings.
Godrej Sara Lee Ltd, a 15-year-old joint venture between the two firms is a market leader in household insecticides in India with brands such as ‘Goodknight’ and ‘Hit’.
In FY10 it posted a net profit of Rs137 crore on revenues of Rs965 crore.
Godrej, which recently acquired personal care firm Tura in Nigeria and household insecticides firm Megasari in Indonesia, saw a 19% rise in its international business in FY10.
The company is now concentrating on Latin America and is eyeing acquisitions there, Sehgal said.
Godrej Consumer also confirmed it is looking at private equity funding along with a share sale to institutions to raise funds for this acquisition and upcoming buys.
“We already have shareholders approval for 3,000 crores, a large part of will come from debt and some of it will come from equity dilution..QIP will be one option and PE funding is another...it will be decided in the next few weeks,” Sehgal said.
Reuters on Tuesday had reported the firm is in talks with a clutch of private equity investors to raise $125 million.
Cost Pressure
The firm has also raised prices of its hair colour products by 5-10% with immediate effect, Sehgal said.
“We are raising prices of our hair care products after facing cost pressures in this segment for the past 20-23 months..in other categories right now raw material prices are benign so there are no hikes planned immediately,” Sehgal said.
Godrej Consumer, which makes and sells several brands across soaps, hair care and toiletries segments, is best known for its flagship brand ‘Cinthol’ and ‘Godrej Expert Hair Dye’.
At 3.18 p.m., shares of the firm were up 13.66% at Rs338.7 in a firm Mumbai market.
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First Published: Thu, May 13 2010. 03 05 PM IST