Dolat Capital recommended Accumulate rating on Colgate Palmolive (India) with a target price of Rs 1329 in its research report dated May 28, 2019.
Dolat Capital's research report on Colgate Palmolive (India)
The Q4FY19 results were in line with our expectation. On a base of 4%, the company was able to post a 5% volume growth. We view this as a strong performance, considering the slowdown in most consumer categories and intense competition in the oral care category. We attribute the improvement in volume performance to the recent launch of Swarna Vedshakti and corrective action in the natural portfolio. We believe that its volume growth should recover on a favorable base. Also, the impact of the rise in distribution reach of Swarna Vedshakti will help raise market share in the natural category. We maintain our FY20E and FY21E earnings at `30.7 and `33.2, respectively, as our hypothesis of improvement in volume growth is holding true.
We value the stock at 40x FY21 EPS to arrive at a TP of ` 1,329. Maintain Accumulate.
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