Moneycontrol
Jun 09, 2017 07:38 AM IST | Source: Moneycontrol.com

Buy Colgate Palmolive; target of Rs 1109: Reliance Securities

Reliance Securities is bullish on Colgate Palmolive has recommended buy rating on the stock with a target price of Rs 1109 in its research report dated May 16, 2017.

 
 
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Reliance Securities' research report on Colgate Palmolive


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 Rs 1.4bn. 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.


Outlook


We believe that GST roll-out, continued strength of its flagship brand Colgate Dental Cream (CDC), increased traction in Cibaca Vedshakti and strong pricing power will drive growth for Colgate in coming years. Hence, we maintain our BUY recommendation on the stock with a Target Price of Rs 1,109, which implies an upside of 12% from current levels.


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