Gillette India share price skyrockets 8% fueled by strong March quarter performance. Should you Buy, Sell or Hold?

Stock Market Today: Gillette India share prices skyrocketed 8% during the intraday trading session on Tuesday post strong March'2024 quarter performance reported by the company after market hours on Monday. 

January-March quarter remained the third quarter for Gillette India that follows July-June financial year.

Gillette India had reported  sales  growth of 10%  year-on-year to   ₹681 crore, which Gillette India attributed to superior innovations across the portfolio, and strong brand fundamentals.

Gillette India's profit after tax stood at ₹ 99 crores, came better than analysts expectations. Analysts at Yes Securities said that they had estimated profit after tax to come at ₹97.6 crore.

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Reported profit after tax though was down 4% year on year compared to ₹102.7 Crore in the year ago quarter, the same was due to one-time tax impacts in the base and current quarters.

The profit before tax on the other hand at ₹142.82 crore grew more than 16% over ₹122.87 Crore in the year ago quarter. 

The Earnings before interest tax depreciation and amortisation at ₹160.3 Crore grew 20% year-on-year.

Gillette India attributed the good operational performance to  strong topline growth  and continued premiumization and productivity interventions.

“We continue to deliver strong top line and share growth driven by our teams’ excellent execution of our integrated growth strategy” said LV Vaidyanathan, Managing Director, Gillette India Ltd.  

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Vaidyanathan reiterated the commitment of Gillette India to a focused product portfolio of daily use categories where performance drives brand choice, superiority — across product performance, packaging, brand communication, retail execution and consumer and customer value — productivity, constructive disruption, and an agile and accountable organization. 

Vaidyanathan said that he remains confident that these strategies will continue to help us deliver balanced growth and value creation.

Meanwhile analysts at Yes Securities attributed strong operational performance to 13.5% growth in grooming business and lower key overheads (Advertising & Sales Promotion spends- A&SP) as well as lower  employee costs.

The analysts though expect some increase in A&SP in near term to support innovations  because of recently launched GilletteLabs (razor) nevertheless say that A&SP spends has now come down year to date. In first nine months of performance A&SP is down 90 bps (100 bps make 1%)

Yes Securities expects net profit growth being faster than the revenue growth and says that Due to recent  correction in Gillette India share price, they upgrade their rating to BUY from ADD earlier with a slightly revised target price of Rs7,400. This indicates close to 10% upside from current levels. 

Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before taking any investment decisio