Firstcall Research is bullish on Colgate Palmolive (India)
and has recommended buy rating on the stock with a target of Rs 1508 in its January 31, 2013 research report.
“Colgate-Palmolive (India) Limited is India’s leading provider of scientifically proven oral care products with multiple benefits at various price points. 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 range of products includes toothpastes, Tooth brushes and mouthwashes under the Colgate Brand. As well as a specialized range of dental therapies under the banner of Colgate Oral Pharmaceuticals. These have become the essential part of daily oral hygiene and therapeutic oral care in India.The Company also provides a range of personal care products under the Palmolive Brand name.”
“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 consistent financial performer. Colgate has been ranked as India’ #1 most Trusted Brand across all categories for four consecutive years from 2003 to 2007 and in 2011 by Breand equity’s Most Trusted Brand Survey. It is the only brand to ne in the top three from 2001-2011.”
“Colgate-Palmolive (India) Limited engages in the manufacture and marketing of fast moving consumer goods in India and internationally reported its financial results for the quarter ended 31st December, 2012. The company’s net profit falls to Rs.1110.50 million against Rs.1155.80 million in the corresponding quarter ending of previous year, a decrease of 3.92%. Revenue for the quarter rose 13.63% to Rs. 7837.70 million from Rs. 6897.80 million, when compared with the prior year period. Reported earnings per share of the company stood at Rs.8.17 a share during the quarter, registering 3.92% decrease over previous year period. Profit before interest, depreciation and tax is Rs.1616.70 millions as against Rs.1590.30 millions in the corresponding period of the previous year.”
“At the current market price of Rs 1359, the stock P/E ratio is at 37.11 x FY13E and 33.59 x FY14E respectively. Earning per share (EPS) of the company for the earnings for FY13E and FY14E is seen at Rs.36.62 and Rs.40.46 respectively. Net Sales and PAT of the company are expected to grow at a CAGR of 15% and 11% over 2011 to 2014E respectively. On the basis of EV/EBITDA, the stock trades at 26.09 x for FY13E and 23.44 x for FY14E. Price to Book Value of the stock is expected to be at 36.75 x and 32.91 x respectively for FY13E and FY14E. We expect that the company surplus scenario is likely to continue for the next three years, will keep its growth story in the coming quarters also. We recommend ‘BUY’ in this particular scrip with a target price of Rs 1508 for medium to long term investment,” says Firstcall Research report.
Public holding more than 90% in Indian cos
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