Colgate-Palmolive gets mixed reviews on Q4 show, shares down 6% in two sessions

Over the past year, Colgate shares have gained 60 percent.

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26 Aug, 2025 12:21

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The Street remains divided while digesting toothpaste marker Colgate-Palmolive India's earnings report for the quarter ended March.

On May 14, Colgate-Palmolive India reported a consolidated net profit of Rs 379.82 crore for the March quarter, a growth of 20.11 percent from the year-ago period.

Total sales came at Rs 1,480.66 crore, rising 10.35 percent from the year-ago quarter.

At 9.30 am, Colgate-Palmolive (India) stock price was lower by 0.6 percent at Rs 2,653.95 per share on the NSE, extending losses from the previous session.

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Sales growth in Colgate is likely to be minimal, as shifting consumer behavior in oral care is a slow and difficult process, limiting a sudden acceleration in growth, according to Nomura. The firm has seen witness pressure on volumes due to prolonged weakness in rural demand.

"We expect volume growth for Colgate to remain range-bound in FY25 despite an expected rural recovery, as price increases by Colgate have been higher than inflation and the use of neem stick as an alternative is commonplace in rural areas which limits toothpaste usage," said the brokerage.

Nomura downgraded its rating on Colgate to reduce from neutral. However, the brokerage increased its price target to Rs 2,450 per share, up from Rs 1,425 earlier.

"FY25 will be a testing period for Colgate in terms of the margin trajectory. It seems both gross margin and EBITDA margin have reached unsustainable levels. The dilemma about prioritizing growth compared to maintaining margins will persist, and to accelerate growth, margins may contract," said Motilal Oswal. The brokerage has a neutral call on the counter, with a target price of Rs 2,500 per share.

Colgate-Palmolive India delivered a "solid" fourth quarter with double-digit growth in revenue and all-time-high operating margins, noted global brokerage Jefferies.

However, the company "perplexed" Jefferies' analysts by not giving the split between volume and price/mix in driving the revenue numbers. The brokerage has a 'buy' call on the stock with a price target of Rs 3,020, which is higher than the earlier target of Rs 2,930.

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