Colgate-Palmolive (India) Ltd. share price target

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...

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....

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)...

Given resilient performance despite pandemic, aggressive volume growth, breakthrough innovations and sustained market share gains, we reiterate BUY rating on the stock with a rolled forward target price of Rs. 1,910 based on 42x FY23E adj. EPS. Topline grows with successful new launches Standalone revenue rose 4.1% QoQ to Rs. 1,275cr (+20.0% YoY) led by strong volumes across product categories. The toothpaste segment showed double digit growth with robust demand, while toothbrush and other discretionary segments witnessed a...

Colgate reported strong results with 19.8% revenue growth largely led by volumes. Though a low base quarter resulted in strong growth in Q4, we believe continued healthy traction in rural regions also contributed to strong numbers. New products like Colgate toothpaste for diabetics, Vedshakti Spray & Oil are witnessing strong growth, specifically in chemist & e-commerce channels. Toothpaste category remained insulated from pandemic but toothbrush category growth was adversely impacted given discretionary nature of the product. Gross margins expanded 301 bps...

Maintain BUY with revised TP of Rs. 1,835 and continue to value it at 40x its FY23E EPS.

We are increasing EPS estimates by 6.1%/6.4% for FY22/FY23 and upgrading the stock to Accumulate given 1) Comeback of premium segment in Toothpastes 2) Double digit growth across key categories 3) Gain in market share across Ecom/MT 4) Opportunity to gain share in new segments which have sizeable opportunity and 5) lower tax rate than earlier estimates. Rural demand remains strong, urban demand has come back strongly. CLGT...

Colgate-Palmolive (CLGT)'s weak sales growth trend has persisted in recent quarters, including 4QFY21 the two-year average sales growth stands at 56%. It has now been six years since the company reported over 7% sales growth for any year. With (a) the launch of its Non-Oral Care portfolio and (b) investments under the Brush Twice a Day' campaign seemingly on the...