Colgate-Palmolive (India) Ltd. share price target

We value Colgate based on P/E of 34x on Dec-19 EPS to arrive at a TP of 1,163. We maintain NEUTRAL. Colgate-Palmolive India (Colgate) registered 12/18% volume/revenue growth vs. our expectation of 13.5/16%, respectively. Premiumisation, favorable base & op-lev led to healthy EBITDA/PAT growth of 32/34% respectively (vs. expectation of 21/24%).

Colgate-Palmolive reported 4.6% YoY (18.7% on a comparable base) growth in revenue to | 1033.0 crore (I-direct Estimate 1091.4 crore) with the strong volume growth of 12% aided by low base quarter impacted due to demonetisation. In corresponding quarter, net sales declined by 8.6% and volume were down by ~12%. The company maintained its leadership position with 53.7% and 45.1% market share in toothpaste and toothbrush categories, respectively. However, it is losing market share in toothpaste...

CLGT's volumes grew 12% YoY (est. of +10%) in 3QFY18. Net sales grew 18.2% YoY to INR10.8b (est. of INR9.8b), while EBITDA was up 31.9% YoY (est. of +18.5%) to INR2.8b. Adj. PAT grew 33.5% YoY (est. of +17.2%) to INR1.7b. Market share shrunk in toothpaste category by 170bp YoY (-30bp QoQ) to 53.7% and in toothbrush category by 190bp YoY (-40bp QoQ) to 45.1%. Gross margin continued to expand (+130bp YoY to 65.2% v/s est. of 64.2%). High ad spends (+210bp YoY to 11.7%) were entirely offset by a sharp decrease in other expenses (-340bp YoY to 18.9%) and lower staff cost (-20bp YoY to 7.3%). Thus, the EBITDA margin expanded 290bp YoY to 27.3% (est. of 25.8%). Nine-month performance:Sales, EBITDA and adj. PAT grew 5.3%, 14.9% and 11.4%, respectively. Gross and EBITDA margin expanded 100bp YoY (to 64%) and 220bp YoY (to 26%), respectively.

Revenue increased by 11.2% to Rs. 1077.98 Cr in Q2FY18 when compared to the previous quarter Revenue increased by 11.2% to Rs. 1077.98 Cr in Q2FY18 when compared to the previous quarter

Colgate-Palmolive has posted a decent set of numbers in 2QFY18 with its revenues and EBITDA beating our estimates by 3% YoY and 8% YoY, respectively. While net sales came in at Rs10.8bn, EBITDA and net profit stood at Rs2.9bn and Rs1.8bn, respectively. Although reported net profit fell by 2.1% YoY to Rs1.8bn, adjusted net profit grew by 5% YoY excluding the impact of prior period tax reversal. Expecting the Company to report 10.5% revenue and 13.5% earnings CAGR...

Colgate-Palmolive posted healthy results in Q2 with the 2.8% growth in sales despite ~9% cut in prices in July. The price cut came in the wake of passing on of GST benefit to consumers. The company reported a 150 bps improvements in margins with the controlled spend towards advertisement in a volatile trade environment. With the higher tax outgo, net profit declined 2.1% YoY to | 177.6 crore With the disruption at the wholesale network due to transition to GST, CPIL witnessed ~1% YoY decline in volumes. However, we...

We value Colgate based on P/E of 34x on Sep-19 EPS to arrive at a TP of Rs 1,112. We maintain NEUTRAL. Colgate-Palmolive India (Colgate) registered 3% growth in net revenue vs. our expectation of 8%. Volumes declined 1% vs. expectation of 4%. EBITDA grew 9% to Rs 3bn, in-line with estimates. High taxes (+600bps YoY) resulted in 2% decline in PAT.

Colgate's (CLGT) volumes declined 0.9% YoY (est. of +7%) in 2QFY18. Realization was slightly lower than expected, and thus, sales grew only 2.7% YoY to INR10.8b. EBITDA was up 9.4% YoY (est. of +17.1%) to INR3b. Adj. PAT declined 2.1% YoY to INR1.8b (est. of +10.7%). Market share in toothpaste shrunk 170bp YoY (-30bp QoQ) to 54%, while that in toothbrush contracted 110bp YoY (+50bp QoQ) to 45.5%. Gross margin continued its upward trajectory, expanding 50bp YoY to 63.2%. The sharp decrease in ad spends (-370bp YoY to 11% of sales) and other...

We valued Colgate based on P/E of 34x (earlier 33x) on Jun-19 EPS to arrive at a TP of 1,062. We maintain NEUTRAL rating. Colgate-Palmolive India (Colgate) registered 3.5% contraction in revenues in 1QFY18, with 5% volume decline (in-line). EBITDA and APAT grew by 5% and 8.5% respectively YoY. Channel destocking and rising competition (especially from Patanjali and Dabur) were key reasons for the decline in volumes. Colgate continued to lose market share. Its Toothpaste and Toothbrush market share stood at 54.3% (-160bps YoY) and 45% (-180bps YoY) in 1QFY18.