Home / Markets / Stock Markets /  Multibagger bluechip stock turns 1 lakh to 6 Cr after 2 bonus shares: Buy?

With a market valuation of 93,126.25 crore, Godrej Consumer Products Ltd. is a large-cap company that operates in the FMCG industry. As a subsidiary of the almost 125-year-old Godrej Group, the company boasts a robust portfolio of personal care and home care products. Since the company has announced two bonus shares since its IPO, the shares of Godrej Consumer Products Limited are among the blue chip multibagger stocks that have turned lakhpati investors into crorepatis.

Share price and bonus share history of Godrej Consumer Products

On the NSE, the shares of Godrej Consumer Products Limited closed on Friday at 907.80 apiece, up by 0.022% from the previous close of 907.60. On Friday the stock recorded a total volume of 667,448 shares compared to the 20-Day average volume of 1,254,918 shares. The stock price has skyrocketed from 4.10 as of 22nd June 2001 to the current market price which logs in a multibagger return and an all-time high of 22,041.46%.

In the initial time of the company if an investor had thought of investing Rs. 1 lakh in this company then he/she had got a shareholding of 24,390 shares of the company. After that, the company was giving the investors good returns and then on 22nd June 2017, the company for the first time announced a bonus issue in the ratio of 1:1 after which the share count changed to a total of 48,780 which is double the amount of the previous share count. Not long after on 12 September 2018, the company once again issued the bonus this time in the ratio of 1:2 which altered the share count and made it to a sum of 73,170 shares which is three times that of the initial shareholding which is a very exciting looking figure for the long term investors of the company.

The stock had touched a 52-week-high of 1,072.20 on (14-October-2021) and a 52-week-low of 660.05 on (08-March-2022), indicating that at the current price level the stock is trading 15.33% below the high and 37.53% above the low. For the quarter ended June 2022, the company recorded a promoter shareholding of 63.22%, FIIs holding of 24.03% (down 0.13% QoQ), DIIs holding of 6.05% (up by 0.12% QoQ), and public shareholding of 6.70% (up from 6.69% QoQ).

Stock’s worth and value history

As mentioned earlier, Rs. 1 lakh of investment would have given you 24,390 shares. After the first bonus issue, the figure for shares changed to 48,870 and not only did the initial shares change their value but also increased the worth of your investment as for just Rs. 1 lakh you are now getting double the amount of shares and that time according to the market price the shares would be of more than Rs. 3.24 Crores which is several times high than the initial investment making them Crorepati. If an investor stayed with the company thinking of the long-term then after the second bonus issue the share count would again go up to 73,170 and at the current market price, the worth of the stock would have risen to more than Rs. 6.64 Crores after just two bonus issues making the investor's portfolio and wallet green.

Should you buy the shares of Godrej Consumer Products

The research analysts of the broking company Sharekhan said in a note that “We attended the investor conference call arranged by Godrej Consumer Products Limited (GCPL) to get a clearer perspective on the growth prospects of Africa business from Mr. Dharnesh Gordhon (Business Head – Godrej Africa, Middle East, and USA [GUAM]). On-ground execution through relevant route-to-market strategy, enhancing distribution, new product launches based on consumer insights and preferences were key focus areas of Mr. Gordhon when he was inducted to lead the Africa business. Revenue of GUAM (Africa) business grew by 22% in FY2022 and EBIDTA margin stood almost flat. Mr. Gordon is focusing on broadening of portfolio and investment in communication to consumers to drive consistent double-digit growth in the coming years. Sweating of assets, operating efficiencies, and strong procurement strategy will help OPM of Africa business to consistently improve."

They further claimed that “Change in top management coupled with revamped strategies focuses on growth levers such as higher penetration, cross-pollination, simplifying business in key markets, and increased distribution to drive double-digit revenue growth in the medium term. The company targets consistent improvement in OPM through the route of premiumisation and operating efficiencies in key geographies such as India, Africa, and Indonesia. The stock is currently trading at discount valuations of 44.7x/38.2x its FY2023/FY2024E earnings. We maintain our Buy recommendation on the stock with a revised price target (PT) of Rs. 1,000."

A sustained slowdown in demand in key markets or inflation in raw-material prices would act as a key risk to our earnings estimates in the medium to long term, said the analysts.

Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint.

 

ABOUT THE AUTHOR

Vipul Das

Vipul Das is a Digital Business Content Producer at Livemint. He previously worked for Goodreturns.in (OneIndia News) and has over 5 years of expertise in the finance and business sector. Stocks, mutual funds, personal finance, tax, and banking are among his specialties, and he is a professional in industry research and business reporting. He received his bachelor's degree from Dr. CV Raman University and also have completed Diploma in Journalism and Mass Communication (DJMC).
Know your inner investor Do you have the nerves of steel or do you get insomniac over your investments? Let’s define your investment approach.
Take the test
Catch all the Business News, Market News, Breaking News Events and Latest News Updates on Live Mint. Download The Mint News App to get Daily Market Updates.
More Less

Recommended For You

Trending Stocks

×
Get alerts on WhatsApp
Set Preferences My ReadsWatchlistFeedbackRedeem a Gift CardLogout