Godrej Consumer target seen at Rs 282 post Tura acquisition: Anand Rathi

MUMBAI: Anand Rathi is of the view that acquisition of Nigeria based personal care brand Tura would be strategically fit Godrej Consumer Products to expand in Africa. It has fixed a target price of Rs 282 per share on the stock.

“Godrej Consumer Products (GCP) has acquired Tura, a leading personal care brand (accorded super-brand status) in Nigeria. It also acquired the manufacturing facility in Nigeria and distribution network. The acquisition has been funded solely through internal accruals.

Tura manufactures products such as medicated bar soaps, moisturising lotions and skin creams in Nigeria, where it has a manufacturing plant. It also operates in Ghana, Congo and Cameroon. Its distribution network reaches 70% of total outlets in Nigeria. We believe it reported revenue of Rs 1.2 billion in 2009 and comparable margins with GCP and is growing at CAGR of 17% over last three years.

GCP already operates in Africa through its Rapidol and Kinky subsidiaries. Addition of Tura to its growing product portfolio would provide scale, expand distribution, share manufacturing and sourcing. We value the stock at a target of Rs 282 at PE of 20x FY11e earnings,” the report said.