Colgate reported revenue increase of 5.2% YoY / 23.5% QoQ. Domestic net sales for the quarter reported 7.1% YoY growth. EBITDA margin expanded to 31.8% in Q2FY21 (from 26.4% in Q2FY20) primarily benefitting from Change in inventories to the tune of INR 599 Cr. Raw materials stood at 28.5% of sales (vs 28.8% of sales in Q2FY20). Employee cost was also on increase that grew 18.0% YoY. Purchase of stock in trade for the quarter however was higher at 8.1% of revenue (vs 5.1% in Q2FY20). Overall, EBITDA margin expanded sharply by 541 bps YoY / 224 bps QoQ. Consequently, Net Profit grew 12.3% YoY (+38.4% QoQ) due to lower cost of sales as total expenditure declined 2.5% YoY and lower interest expense that declined 24.5% YoY. Net Profit margin for the quarter expanded by 135bps YoY / 229 bps QoQ to 21.3%....

Colgate Palmolive: Colgate reported a healthy 2QFY21 with 5% net revenue growth (HSIE 4.5%) and 7% domestic growth. Volume and price have equally contributed to the revenue growth. Toothpaste recovery was healthy (no sequential divergences) while toothbrush exit recovery was encouraging. Dental cream and Max fresh posted encouraging recovery. Naturals toothpaste continue to outperform (even as an industry) although the growth gap has gone down. Market share was stable during the quarter. GM expanded sharply (339bps YoY) owing to (1) price hike, (2) soft raw material and (3) favourable mix (lower revenue share of toothbrush and exports and higher share of larger pack size). We expect gradual growth recovery with healthy margin expansion in 2HFY21 and increase our estimates for FY21/22 by 6/1%. We value Colgate at 40x P/E on Sep-22E EPS and derive a target price of Rs 1,529. Maintain ADD. Bajaj Finance: While BAFs 2QFY21 operating performance was in line with estimates, earnings were lower on account of higher than expected provisions. The management was prudent in its approach to growth and provisioning. Even as we build higher provisions, our earnings estimates remain largely unchanged as we factor in a slight improvement in cost metrics. Our outlook on the companys long-term prospects remains positive. We continue to believe that current valuations do not fully capture BAFs high RoAE potential (refer to our recent IC). We maintain ADD with a target price of Rs 3,647. UltraTech Cement: During 2QFY21, UTCEM reported solid earnings beat, driven by strong cost controls, healthy realisation and strong retail demand....

We maintain BUY and TP of Rs. 1,565 as we value the stock at 38x its FY23E EPS.

We initiate coverage on Colgate Palmolive (India) Ltd. (CLGT) with a BUY recommendation and a Target Price of Rs. 1,565, which implies 15% upside from current levels.

Proven the resilient performance for the quarter and an attractive market share recovery in near-term, we retain BUY rating on the stock with a revised target price of Rs. 1,770 based on 50x FY22E adj. EPS. Exceptional brand image benefiting revenue despite pandemic The standalone business revenue showed a dip of 3.9% YoY to Rs. 1,034cr in Q1FY21 as sales volumes remained stagnant YoY, majorly impacted by a fall in toothbrush and body wash segment. Disrupted supply and distribution also added to the decline in revenue. On the contrary, toothpaste segment showed resilience in maintaining its...

Colgate Palmolive reported revenue decline of 4.1% YoY (down 2.9% QoQ) to INR 10,406 mn as toothpaste/toothbrush volumes were affected due to COVID-19 led lockdown and disruptions. EBITDA margin expanded to 29.6% in Q1FY21 (27.6% in Q1FY20). EBITDA increased 2.7% YoY/ +17.2% QoQ. Net Profit grew 17.2% YoY (down 2.9% QoQ) to INR 1,982 mn due to lower taxation rate....

In the last five years, CPIL has lost market share in toothpaste category with consumer preferences shifting toward Ayurveda & Natural brands. Though market share has stabilised after launch of Ved Shakti, we believe gaining market share would not be easy given overall toothpaste category has been growing at a snail's pace. The company has been putting efforts to drive growth through large scale campaigns & innovations. It has launched Palmolive hand sanitisers & Colgate gentle toothbrushes in Q1. We believe the company would be only able to drive volume through Colgate Vedshakti...

Colgate-Palmolive India Ltd's (CLGT) 1QFY21 topline (including other operating income) declined by 4.1% YoY to Rs10.4bn (vs est. 14.1% decline to Rs9.3bn). The company has mentioned that the Toothpaste business delivered positive sales growth for the quarter. While the company has not shared the toothpaste volume growth in the press release, we believe, based on higher cut in trade spends/promotions in the market, the toothpaste volume would have declined by ~6% YoY with overall volume declining by ~8% YoY. The toothbrush category, being more discretionary in nature, had a higher impact on overall results. Gross margin expanded by 30bps YoY to 66.1% (up 150bps QoQ). Savings in advertisement spends (down...

While the company did not give out market share for 1QFY21, we believe the flattish volumes indicate good performance under in 1QFY21 to INR10.4b (v/s est. We arrive at a TP of INR1,660/share (target multiple of 43x Jun22E EPS, based A combination of the sharp market share decline in recent years and increased penetration of the category itself has meant single-digit top line growth over the last 10 years. Due to the market share decline in recent years, sales/EBITDA/PAT was even lower over the past 5 years at ~3%/~8%/~8% CAGR. Importantly, the company does not need any material on CLGT from a one-year perspective given that (a) the nature of the category (98% of sales from oral care) offers less uncertainty currently, (b) it has amongst the best-of-breed balance sheets, (c) valuations are moderate at 39.5x FY22E EPS, close to its 10-year average, and (d) there is a spark of an incipient market share recovery under the new Managing Director.

We are increasing FY21,22,23 EPS estimates of CLGT by 8.2%, 5.7% and 4.8% led by 1) lower volume decline of 6% in toothpaste, and largely normal production now 2) Trade inventory buildup in June which continues in 2Q as well 3) superior on shelf availability relative to Patanjali, Vicco and other...

Focus on MT/Ecomm channel will continue to drive its premium portfolio and market share gain (160/200bps yoy market share gain in MT/Ecomm channel in 4Q). Co expects to expand its gross margin and is investing behind its brands. We cut EPS estimates for FY21/FY22 by 3% to factor in subdued category growth and moderation in premiumisation trend. We value COLGATE at 38x on Mar-22E EPS, deriving a TP of Rs 1,328. Maintain ADD. Colgate saw a 7% yoy dip in its revenues as lockdown impacted primary sales. However, co witnessed positive momentum pre-Covid with market share gain for toothpaste. Most personal care companies/categories struggled in 4Q (HUL BPC down by 14% yoy, Marico PCNO/VAHO down by 12/18% yoy, GCPL India business down 18% yoy and Gillette down 13% yoy). We believe oral care being an essential category will recover quickly and revenue loss due to channel disruption will be minimal (unlike many FMCG categories). Cos new launches are exciting and expect similar aggression in the coming years.

Colgate (CPIL) reported a dismal set of numbers with 7.4% decline in sales and 8% dip in volumes. The growth was largely impacted by 10 days loss of sales due to the lockdown in the country. The company maintained its gross margins at 64.6% in Q4FY20. However, employee expenses as percentage of sales was up 200 bps manly due to operating de-leverage. The company maintained its marketing spend at | 155 crore, which was 100 bps higher (percentage to sales) given decline in sales. CPIL did not withdraw media spend despite disruption at the end of quarter. Other overhead were lower...

respectively based on 1) Covid impact on production and sales in 1Q 2) 3) delay in opening of high focus modern trade in top cities. Mgt strategy is now centered on 1) gaining share in urban India with value added premium products (Bamboo Toothbrush, Charcoal Toothpaste and naturals segment...

Revenue for the standalone business improved by 4.1% YoY to Rs. 1,136cr in Q3FY20, with Domestic net sales growing 4.3% YoY pulled down by a lackluster growth in volumes (+2.3% YoY). We believe that a reversal of slowdown in rural sales is essential for a topline turnaround. To tackle the rising competition and adverse market conditions, the company increased its advertising and promotional expenditure by 13.8% YoY and employee expenses by 8.4% YoY. This additional expenditure resulted in the EBITDA margins contracting by 100 bps to 27.8%. Net Profit grew 3.6% YoY to Rs. 199cr primarily aided by lower taxes (-23.8% YoY to Rs. 68cr). Adjusting for the...