Buy Colgate Palmolive; tgt of Rs 1115: Firstcall Research

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Buy Colgate Palmolive; tgt of Rs 1115: Firstcall Research

Firstcall Research is bullish on Colgate Palmolive (India) and has recommended buy rating on the stock with a target of Rs 1115 in its February 1, 2012 research report.

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Firstcall Research is bullish on Colgate Palmolive (India) and has recommended buy rating on the stock with a target of Rs 1115 in its February 1, 2012 research report.

"Colgate-Palmolive is Rs1,300 crore company started in year 1937. In domestic market it enjoys 50% of market share. It spread across 4.5 million retails outlets out of which 1.5 million are direct outlets. The Company is having four wholly owned subsidiaries namely Colgate-Palmolive (Nepal), Multimint Leasing & Finance and Jigs Investments and Passion Trading & Investment Company. In November 2007, it acquired a 75% equity interest in Advanced Oral Care Products, Professional Oral Care Products and SS Oral Hygiene Products, the company is the fastest growing and one of the oldest companies catering to the personal care products. The company is regularly coming up with new products and has been a consintent financial performer."

"Colgate Palmolive India has posted a net profit of Rs 1,155.80 million for the quarter ended December 31, 2011 as compared to Rs 662.70 million for the quarter ended December 31, 2010, representing an increase of 74.41%. Net sales has increased from Rs 5766.40 million for the quarter ended December 31, 2010 to Rs 6897.80 million for the quarter ended December 31, 2011, representing an increase of 19.62%. Total Income surged to Rs.6995.20 million for the quarter ended Dec 2011. The EPS of the company is stood at Rs.8.50 for the quarter ended Dec 2011."

"At the current market price of Rs.987.00, the stock is trading at 31.00 x FY12E and 27.23 x FY13E respectively. Earning per share (EPS) of the company for the earnings for FY12E and FY13E is seen at Rs.31.83 and Rs.36.24 respectively. Net Sales and Operating profit of the company are expected to grow at a CAGR of 15% and 10% over 2010 to 2013E respectively. On the basis of EV/EBITDA, the stock trades at 22.01 x for FY12E and 19.44 x for FY13E. Price to Book Value of the stock is expected to be at 16.43 x and 10.25 x respectively for FY12E and FY13E. We expect that the company will keep its growth story in the coming quarters also. We recommend 'BUY' in this particular scrip with a target price of Rs 1115 for long term investment," says Firstcall Research report.  

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To read the full report click on the attachment