Accumulate Colgate Palmolive; target of Rs 1223: Dolat Capital

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26 Aug, 2025 12:21

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Dolat Capital's research report on Colgate Palmolive

The Q2FY19 results came in line with our expectation. On a favorable base of 1% volume decline the company was able to post 7% growth. After consecutive 7 quarters of lackluster volume performance, the company was able to show some improvement in volume growth. Our analysis suggests that the company has gained 220bps volume MS in toothpaste category sequentially and 20bps on YoY. However, Colgate lost 250bps market share in toothbrush category sequentially, was discouraging. 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 as better monsoon during the year would support. In addition, we believe that the impact of increase in reach of Swarna Vedshakti would help it to garner share in the natural category.

Outlook

We have revised our FY19E & FY20E earnings to ` 28.1 & ` 30.6 respectively to factor in the Q2 performance. Maintain Accumulate with TP of ` 1,223 (40x FY20E).

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