Accumulate Colgate Palmolive (India); target of Rs 1507 KRChoksey

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KRChoksey's research report on Colgate Palmolive (India)

Colgate Palmolive reported revenue decline of 4.1% YoY (down 2.9% QoQ) to INR 10,406 mn as toothpaste/toothbrush volumes were affected due to COVID-19 led lockdown and disruptions. EBITDA margin expanded to 29.6% in Q1FY21 (27.6% in Q1FY20). EBITDA increased 2.7% YoY/ +17.2% QoQ. Net Profit grew 17.2% YoY (down 2.9% QoQ) to INR 1,982 mn due to lower taxation rate. Net Profit margin for the quarter expanded by 346 bps YoY to 19.0% (flat QoQ).

Outlook

We apply a PE multiple of 43.5x on FY22E EPS of INR 34.6 (earlier 43.5x on INR 34.1) and arrive at a revised target price of INR 1,507 per share, an upside potential of 5.1% from CMP. Accordingly, we reiterate an “ACCUMULATE” rating on the shares of Colgate Palmolive.

For all recommendations report, click here

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