Colgate-Palmolive (India) Ltd. share price target

Maintain BUY rating on the stock with a revised TP of Rs1,750 at 39x FY24E EPS. Key risk increase in competitive intensity, prolonged rural recovery and higher raw material inflation.

2QFY23 revenues growth of 2.6% YoY was again underwhelming but not unexpected.

Maintain BUY with a revised TP of Rs 1,780/share (Rs 1,650/share earlier) at 39x FY24E EPS.

Investments in innovations and new product launches, coupled with advertising and digital transformation measures would contribute to revenue growth in future. The stock is currently trading at attractive valuations. Hence, we upgrade our rating on the stock to BUY with a rolled forward TP of Rs. 1,690 based on 34x FY24E adj. EPS. Aggressive pricing aids topline In Q3FY22, standalone revenue rose 3.8% YoY to Rs. 1,271cr (-5.4% QoQ) driven by price hikes and brand penetration across product categories. CPIL will continue to...

Maintain BUY with revised TP of Rs. 1,650 (earlier Rs. 1,765) at 39x FY24E EPS.

Volume growth remains muted; margins peak out in India. The company has more than 50% market share in the toothpaste category. The major brands include Colgate Dental Cream, Colgate Total, Colgate Max-Fresh. With the changing consumer preference for naturals products, CPIL is focusing on growing Colgate Vedshakti brand. Recently, it has launched toothpaste for Diabetics,...

back of 1) Increased Input cost inflation and 2) Low volume growth expected margins over FY21-24 post sharp 460bps gains in FY21. Premiumisation trend continues with Colgate Total, Sensitive and Charcoal...

Colgate (CLGT) reported another weak quarter of results, with sales/EBITDA/PAT growth in the 24% range. In addition to weak sales growth, material cost pressures are evident; margins came in marginally below estimates despite the sharp 24% cut in ad spends YoY. We maintain a Neutral rating as we do not see any valuation re-rating unless the sales growth traction returns....

Higher pricing, optimizing trade spending, enhancing productivity and premiumization are core themes, the company plans to focus on in the coming quarters. However, input cost inflation, higher Ad spends to revive sales and weak rural demand scenario remain headwinds in the near-term. Hence, we downgrade our rating on the stock to HOLD with a revised TP of Rs. 1,650 based on 37.5x FY23E adj. EPS. Topline sees further recovery, as penetration remains strong During Q2FY22, company's standalone revenue rose 16.1% QoQ to Rs. 1,344cr (+5.2%...

Maintain BUY with revised TP of Rs. 1,765 (earlier Rs. 1,875) as we also lower our multiple a notch to 39x FY24E EPS.

CLGT's 2QFY22 result was in line with our estimates. Two-year average sales growth, at 5.2% in 2QFY22, continues to remain in the 4-6% range seen in recent quarters, with little indication of an improvement, despite consistent advertising spends. With: a) the launch of the Non-Oral Care portfolio, and b) investments under the brush twice a day' campaign seemingly on the back burner, it is unlikely to return to double-digit sales growth seen over FY0815 anytime soon. We maintain our Neutral view on weak topline growth, rising material cost pressures, and limited scope for price hikes....

We are cutting EPS estimates by 6.4%/3.1%/3.5% for FY22/FY23/FY24 on the back of 1) Increased Input cost inflation and 2) Low volume growth expected in 2H22 given large base in 4Q21 and 3) Flattish EBIDTA margins over FY2124 post sharp 460bps gains in FY21. Increased promotions during the Quarter resulted in ~4.2% volume growth but with pressure on realisations. CLGT is...

Favourable RM costs; elevated margins to sustain The company has more than 50% market share in the toothpaste category. The major brands include Colgate Dental Cream, Colgate Total, Colgate Max-Fresh. With the changing consumer preference for naturals products, the company is focusing on growing Colgate Vedshakti. Recently, it launched toothpaste for diabetics, Colgate Vedshakti Oil Pulling & Vedshakti mouth spray. Colgate has a distribution reach of 6.5 million outlets. The company commands one of the highest gross margins in the industry and spends...

Maintain BUY with revised TP of Rs. 1,875 (Rs. 1,835 earlier) as we roll forward our estimates to FY24E (40x its FY24E EPS).

We are increasing EPS estimates by 2.7%/2.9% for FY22/FY23 on the back of 1) Superior gross margins due to increased premiumisation and lower sales of toothbrush 2) higher Category growth and salience for large packs 3) increased Ad spends (up 280bps YoY) and ramp up in innovations and 4)...