Colgate-Palmolive (India) Ltd. share price target

Colgate-Palmolive India Ltd (CPIL) reported decent numbers for Q2FY19, in line with our expectation. Its revenue grew by 7.7% yoy driven by volume growth. Its EBITDA and PAT grew by 9.6% and 10.6% yoy respectively due to decrease in employee expense and cost efficiency.

Colgate Palmolive (India) Ltd Q2FY19 results Comment Revenue grew by 12.3% to Rs. 1160.63 Cr in Q2FY19 when compared to the previous quarter. Also, it increased by 7.67% when compared with Q2FY18.

ICICI Securities Ltd | Retail Equity Research CPIL posted 7.7% YoY sales growth led by 7% volume growth as it had taken a 10% price cut on account of GST benefit to consumers CPIL maintained its leadership position with volume market share in toothpaste & toothbrush categories at 52.5% and 44.2%, respectively albeit losing market share in toothpaste segment due to aggressive competition especially in ayurvedic and naturals' toothpaste EBITDA margins improved 48 bps to 28.2% mostly on account of...

We value based on P/E of 35x on Sep-20 EPS to arrive at a TP of Rs 1,163. Colgate registered 7/8% volume/value growth as compared to exp. of 5/8%. There is a slight recovery in revenue growth considering 4% revenue CAGR during the last 8 quarters. Colgate enjoyed the benefits of pan-India launch of Swarna Vedshakti (naturals). Soft input inflation and decline in employee expense led to EBITDA/APAT growth of by 10/11% (exp. 12/15%)

The Q2FY19 results came in line with our expectation. On a favorable base of 1% volume decline the company was able to post 7% growth. After consecutive 7 quarters of lackluster volume performance, the company was able to show some improvement in volume growth. Our analysis suggests that the company has gained 220bps volume MS in toothpaste category sequentially and 20bps on YoY. However, Colgate lost 250bps market share in toothbrush category sequentially, was discouraging. We attribute the improvement in volume performance to recent launch of...

29 October 2018 low base (1% decline in 2QFY18). Net sales grew 7.7% YoY to INR11.7b (our Toothbrush market share declined 40bp QoQ (-130bp YoY) to 44.2% over the same period. PAT grew by 7.1% (with ~5.5% toothpaste volume growth)/16.8%/15.7%. EBITDA margin expanded 230bp YoY to 27.7%. For 2HFY19, we expect sales/EBITDA to increase 5.3%/1% YoY, and adj.

We value Colgate based on P/E of 35x on Jun-20 EPS to arrive at a TP of Rs 1,185 (Rs 1,219). Colgate registered 6.6/4% revenue/volume growth (exp. 11/6%). Despite favorable base (-5% in 1QFY18), good traction for Swarna Vedshakti and improving consumption dynamics, volume growth remained tepid.

ICICI Securities Ltd | Retail Equity Research The company reported 6.9% YoY decline in revenue (6.5% growth on a comparable base) to | 1,041.3 crore (I-direct estimate: | 1,114.7 crore) with mere 4% volume growth despite a low base quarter CPIL maintained its leadership position with 52.4%, 44.6% market share in toothpaste, toothbrush categories, respectively. However, it is losing market share in toothpaste segment due to aggressive competition, especially in ayurvedic and naturals' toothpaste...

The Q1FY19 revenues came below our expectation. Albeit, on the favorable base of 5% dip in volume, the company posted mere 4% volume growth. This was not encouraging considering the other company like HUL is growing faster compared to Colgate in the oral care category. We attribute this lower growth to the high competitive intensity and delayed corrective action to enter in natural category. Yet, improvement in margin during the quarter was a savior. We believe that the company would report gradual recovery in volume growth on favorable base (-1% in Q2FY18) as better monsoon during the year would...

The company, yet again, reported drop in market share in toothpaste category in FY18 as volume share declined to 53.4% in FY18 from 55.1% in FY17 mainly due to intense competition, high dependence on wholesale channel and lower growth rate in Naturals segment. To counter competition in the Naturals space, the company launched Colgate Swarna Vedshakti (CSV) in the south (in October 2017) and after its success, the company now plans to roll it out nationally. It has also relaunched MaxFresh toothpaste to support volume growth. Further, the company is strenthening its direct reach given its high dependence on the wholesale channel. Although management guided volume growth of 45% which we believe is slightly on a lower side, we factor revenue CAGR of 11.8% over...