Even before the new CEO has taken over (in Oct'21), Godrej Consumer Products (GCPL), one of the leading FMCG companies, has been performing consistently well in various large categories over the past year. Household Insecticides (HI) and Soaps posted a double-digit two-year CAGR during 1QFY22.

The sales momentum is also leading to increased asset turns. Consequently, ROCE seems poised to cross 20% levels for the first time in a decade.

Commenting on the outlook, Motilal Oswal Institutional Equities said, "There is still possibility of significant improvements in ROCEs with a) the sales momentum picking up further under the new CEO, b) increase in the contribution of the higher margin, higher ROCE domestic business to sales, and c) continued efforts to boost margins and ROCEs in the international business. Maintain Buy, with target price of Rs 1,250 (45x Dec'23 EPS)."

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