Buy Colgate Palmolive India; target of Rs 2687: Sharekhan

Sharekhan's research report on Colgate Palmolive India

Colgate-Palmolive (India)’s (Colgate’s) Q1FY26 numbers were weak missing estimates on all fronts, with revenues falling 4% y-o-y, OPM down ~240 bps y-o-y and PAT declining 12% y-o-y. Soft urban demand, stiff competition and high base hit revenue growth, while margins were hit by negative operating leverage and continued brand investments. Gradual recovery eyed in H2FY26. Two innovative formats - Colgate Kids Squeezy Toothpaste and MaxFresh Mouthwash Sachet Stick - launched in kids and mouthwash portfolios.

Outlook

Stock has corrected by 13% from recent highs and trades at 44x/40x its FY26E/FY27E EPS, respectively. We maintain a Buy with revised PT of Rs. 2,687.