KRChoksey's report on Colgate Palmolive (India)
"Colgate-Palmolive reported Net Sales of Rs. 1,001 Crs. an increase of 11% Y-o-Y and 4.5% q-o-q mainly because of strong volume growth of 7% for the quarter on toothpaste. The company’s operating profit was Rs. 187 Crs. an increase of 240bps y-o-y and it missed its operating margins by 159bps q-o-q. The Net Profit stood at Rs. 130 Crs with 13% margin with increase of 80bps y-o-y but dips in margin compared to q-o-q by 114bps."
"With tough competition in oral category, Colgate’s has continuously remained committed in oral care category through innovation and technology. Its focus remained on reducing cost, driving efficiencies and gaining and maintaining its position and market share in core category like toothpaste and toothbrush. Margins remained muted despite strong volume growth and going forward would see margins to stabilize. At CMP of Rs. 1,714, the stock is trading at 33.4x FY15E & 29.1x FY16E. We recommend a ACCUMULATE on the stock with a target of Rs 1,940 with a potential upside of 13.2 %", says KRChoksey research report.
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