Colgate-Palmolive (India) Ltd. share price target

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...

Net sales grew only 3% YoY as volumes declined ~3% due to sustained pressure in wholesale. Toothpaste market share declined 120 bps YoY to 54.1% but toothbrush market share grew 160 bps YoY to 47.4%.

Colgate-Palmolive India (Colgate) registered weak numbers in 4QFY17. Revenue was down 2.2% YoY to Rs 10.3bn, below our expectations (6.5%). Volumes contracted 3% vs. our expectations ( 1.5%). EBITDA and APAT grew by 1.2% and -0.5% respectively YoY.

It reported 2.6% YoY revenue growth to | 1171.8 crore (I-direct estimate: | 1242.9 crore). The company witnessed 3% YoY volume decline against our estimate of 1%, due to the muted pick-up in the wholesale channel. It continued to maintain its leadership with 55.1% (55.4% in December 2017) and 47.4% (47.0% in December 2017) market share in toothpaste and toothbrush categories, respectively Raw material cost as a percentage of sales declined 139 bps YoY. However, the company aggressively invested in brand building and...

Wholesale De-stocking & Higher A&P; Spend Impact Growth Colgate-Palmolive has delivered a subdued performance in 4QFY17 with its revenues growing by 2.5% YoY to Rs10.3bn, while net profit remained largely flat at Rs1.4bn. Its overall quarterly volume fell by 3% YoY due to weakness in wholesale trade post demonetisation. Growth in net profit was stagnant due to higher investment in brands through advertising spends. Looking ahead, we expect the Company to deliver 13.2% and 16.8% CAGR in revenue and earnings, respectively through FY17-19E. Valuations at 34.3x FY19E earnings are reasonable, in our view considering that the stock has traded at average one year forward PE multiple of 40x...