Accumulate Colgate Palmolive India; target of Rs 2730: Geojit Financial Services

Geojit Financial Services research report on Colgate Palmolive India

Colgate-Palmolive (India) Ltd (Colgate) makes oral and body care consumer products such as soaps, cosmetics, toilet preparations, toothpastes, toothbrushes, shaving brushes, and glycerin. In Q3FY25, consolidated revenue increased 4.7% YoY to Rs. 1,452cr, primarily driven by volume growth in the toothpaste segment, despite the relatively soft demand in the urban market. Toothpaste segment reported mid-single-digit intrinsic volume growth, while toothbrushes showed competitive growth, driven by science-backed innovations in the premium portfolio. The company remains committed to delivering sustainable and profitable growth, with a focus on oral and personal care in the Indian market. The company's EBITDA for Q3FY25 stood at Rs. 454cr, down 3.0% YoY, while EBITDA margin decreased 250bps to 31.3%, primarily due to an increase in the cost of sales of 11.6% YoY. The company's profit after tax (PAT) for Q3FY25 stood at Rs. 323cr, as against Rs. 330cr in Q3FY24.

Outlook

Therefore, we upgrade our rating to ACCUMULATE from REDUCE on the stock, with a rolled forward target of Rs. 2,730, based on 43x FY27E adjusted EPS.