Godrej Consumer Products shares declined 0.61% to ₹1,246.40 by mid-afternoon on Wednesday, despite multiple brokerages upgrading their estimates following the company's encouraging Q3 FY26 business update. The stock opened higher at ₹1,273.90 but failed to sustain gains, trading within a range of ₹1,237-1,273.90 with 10.42 lakh shares changing hands.

Strong Q3 FY26 Performance Exceeds Expectations

The consumer goods major released its Q3 FY26 business update on Monday, indicating double-digit standalone revenue growth driven by nearly double-digit underlying volume growth. The performance exceeded initial brokerage projections, prompting analysts to revise their forecasts upward across key metrics.

Brokerage Upgrades and Target Prices

Nuvama upgraded its estimates substantially following the strong quarterly update. The brokerage now expects revenue and EBITDA to grow 10% and 21% year-on-year respectively, compared to earlier projections of 8% and 18%. Nuvama raised its volume growth estimate to 10% from 8%, maintaining a 'Buy' rating with a target price of ₹1,350.

Nomura also retained its 'Buy' rating with a target price of ₹1,520, noting that consolidated revenue growth close to double digits exceeded expectations. The brokerage forecasts consolidated margins of 20.7% for the quarter, driving 12.8% year-on-year EBITDA growth.

Segment-wise Growth Outlook

The company's business segments are expected to deliver varied growth rates during the quarter. Home care is projected to deliver double-digit growth around 10%, while personal care should grow in mid-single digits at approximately 5%, aided by a recovery in the soaps category.

Standalone EBITDA margins are expected to return to normalised levels of 24-26%, supported by favourable input costs and improved operating leverage. This margin improvement reflects the company's operational efficiency gains during the quarter.

Regional Performance and Market Conditions

The company cited strengthening demand conditions in India during the quarter, expressing confidence in gradual consumption improvement driven by falling inflation and lower GST rates. However, regional performance showed mixed results across different markets.

Indonesia continues facing competitive pricing pressures, though management sees early stabilisation signs in the market. The GAUM cluster maintained strong performance across revenue and profitability metrics, contributing positively to overall results.

Despite the positive business update and brokerage upgrades, the stock's decline reflects broader market sentiment and profit-booking activities. SBI Securities maintained a neutral short-term stance despite acknowledging the improving consumption trajectory and consolidated revenue approaching double-digit growth.

Godrej Consumer Products has reported steady improvement in demand throughout the quarter, signaling positive momentum for the FMCG major. The company's announcement highlights resilient performance in its consumer products business amid prevailing market conditions.

Demand Recovery Trends

The steady improvement in demand throughout the quarter reflects the company's ability to navigate market challenges effectively. This positive trend indicates consumer confidence returning to the FMCG sector, with Godrej Consumer Products positioned to benefit from the recovery.

Business Performance Indicators

The reported demand improvement suggests that the company's product portfolio continues to resonate with consumers across various market segments. This development points to effective market strategies and brand positioning that have helped sustain business momentum.

Market Positioning

As a significant player in the FMCG space, Godrej Consumer Products' steady demand improvement reflects broader sector dynamics. The company's performance indicates its competitive positioning and ability to maintain market share during challenging periods.

Outlook Considerations

The steady improvement in demand throughout the quarter provides a positive foundation for the company's ongoing operations. This trend suggests potential for sustained business performance as market conditions continue to evolve in the consumer products sector.