Shares of Colgate Palmolive (India) slipped over 2 percent to Rs 2,320 in morning trade on July 23 after the company reported an 11.8 percent year-on-year decline in net profit to Rs 321 crore for the quarter ended June 30, 2025.
Net sales dropped 4.4 percent to Rs 1,421 crore from Rs 1,486 crore a year ago. Revenue from operations also fell 4.3 percent to Rs 1,433 crore, while total income declined to Rs 1,433 crore from Rs 1,496.71 crore in the corresponding quarter of the previous year. The company's operating margin shrank to 31.6 percent from 34 percent, marking a contraction of 240 basis points.
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Following the results, brokerages expressed mixed views on the stock. Nomura downgraded the stock to a 'Reduce' rating with a target price of Rs 2,350 per share. It said Q1 results missed expectations, with volumes falling 3–4 percent year-on-year and EBITDA declining 11 percent. The weakness was attributed to subdued demand and a high base. While new product launches are aiding premiumisation, Nomura flagged continued margin pressure due to higher promotions and negative operating leverage.
HSBC retained a 'Hold' rating while trimming its target price to Rs 2,600 per share, noting that Q1FY26 performance was even weaker than expected despite earlier guidance for a soft H1FY26. The brokerage said EBITDA margins declined even as the company controlled advertising and promotion (A&P) spends. It expects a gradual recovery in the second half of FY26 but believes structural growth potential remains limited.
Goldman Sachs maintained a 'Sell' call with a target price of Rs 2,300, highlighting a 4 percent drop in revenue and an 11 percent decline in gross EBITDA year-on-year. PAT also slipped 12 percent. The brokerage noted that despite lower ad spends, margins were under pressure as gross margin fell. Goldman cut its FY26 and FY27 earnings estimates by 3–4 percent.
Citi echoed a bearish stance, retaining a 'Sell' rating and reducing its target price to Rs 2,175 from Rs 2,300. The brokerage pointed to weak revenue and EBITDA performance, citing soft urban demand, increased competitive intensity, and a high base. It expects these headwinds to persist into the second quarter, with only a gradual recovery seen in the latter half of the fiscal year.
Offering a more optimistic outlook, Nuvama maintained a 'Buy' rating with a target price of Rs 3,135. It acknowledged the Q1 softness in revenue and EBITDA, which it attributed to muted urban demand and a high base, noting that toothpaste volumes declined 2 percent year-on-year against an 8–9 percent base. Margins were impacted by heavy promotional activity and weak operating leverage, but the firm expects a recovery in H2FY26.
At about 9:30 am, shares of the company were trading at Rs 2,331, lower by 2.1 percent from the last close on the NSE. Colgate Palmolive India shares are down 11 percent year-to-date.
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