Dolat Capital's research report on Colgate Palmolive (India)
The Q3FY19 results came in line with our expectation. On an unfavorable base of 12% volume growth the company was able to post 7% growth. After consecutive 7 quarters of lackluster volume performance, in the second succesive quarter, the company was able to show improvement in volum e growth. We attribute the improvement in volume performance to recent launch of Swarna Vedshakti and corrective action in natural portfolio. We believe that the company would report gradual recovery in volume growth on favorable base. In addition, the impact of increase in reach of Swarna Vedshakti would help it to garner share in the natural category. We have maintained our FY19E & FY20E earnings to ` 28.1 & ` 30.6 respectively as our hypothesis on improvement in volume growth is holding true.
Outlook
We have introduced FY21E EPS estimate at ` 33.5. Valuing stock at 45x FY21 EPS to arrive at a TP of ` 1,509. Maintain Accumulate.
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