Emkay's research report on Colgate Palmolive (India)
Amid challenging demand environment and negative category growth, reports resilient 5% volume growth and market share gains in both Toothpaste and Toothbrush
Fiscal phase out from Baddi will increase excise duty and tax rates, thereby impact topline and profitability. However, drivers to growth remains intact led by strong innovation pipeline, premiumisation, aggressive expansion plans and distribution-led growth
Channelizing of ad & promotion spends on enhancing brand equity and innovation over increasing share of voice is reaping benefits. Expect premiumisation and focused ad spends to drive margin expansion thesis
Despite competitive intensity in oral care, company is confident of meeting growth targets. We remain positive on structural growth drivers of market share gains, innovation-led growth and premiumisation. Retain BUY with revised price target of Rs2,200/share.
Valuation and View - "Company seems to be in line with its strategy of focusing on breakthrough innovations, rising focus on value addition and premiumisation, gain market share and channelize spends towards branding & innovation over promotional activity. Long term growth drivers remain intact with strong franchisee and likely uptick in urban demand will further drive volume growth. We retain BUY with price target of Rs 2,200/share", says Emkay Global Financial Services research report.
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