Colgate-Palmolive (India) Ltd. share price target

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.

ICICI Securities Ltd | Retail Equity Research Colgate Palmolive India (CPIL) has emerged unscathed from the preGTS de-stocking impact. The company witnessed mere 2.8% sales decline despite large dependency on wholesaler's network & trade expectation of price cut post GST on the back of a decline in indirect tax incidence from 24% to 18%. Volume declined 5% YoY (against our estimate of ~10% dip) largely due to de-stocking at trade level The company lost 140 bps & 120 bps market share in toothpaste & toothbrush category, respectively, during the quarter. However, it...

Broadly inline; Some stability seen in toothpaste market-share Colgate's operating performance was expectedly muted in 1QFY18 with volumes down 5% YoY (vs expectation of -4%). Net sales realisation growth, though, was much lower than what we expected (details below) which resulted in a c.3% revenue decline (vs forecast of 3% growth). The company surprisingly effected a 7.9% cut in A&P; spends which helped drive a 5% operating profit growth. The key positive highlight, though, was the stability in toothpaste market share (on sequential comparison) at 54.3% after witnessing continuous decline since mid-2015. On the negative side, toothbrush seems to have lost share after...

ICICI Securities Ltd | Retail Equity Research With the rollout of GST and tax clarity on the toothpaste category, Colgate-Palmolive (CPIL) has emerged as one of the major beneficiaries of GST among companies under our coverage. Under the new tax regime, the average indirect tax rate for toothpaste has come down to 18% from ~23-24%. Following the anti-profiteering clause, we were expecting price cuts to the tune of ~6-7% for the category. However, CPIL has intimated distributors about the cut across price points in the tune of 7-11% in both...