Motilal Oswal's research report on ColgateColgate’s net sales grew 1.8% YoY to INR10.1b (est. of INR 10.5b), with modest 1% volume growth (10-year low) in the Toothpaste segment (below our expectation of 4.5%). We believe heightened competitive intensity and sluggish market growth is hurting Toothpaste volumes. Organic sales growth was 7%, offset by phasing out of fiscal benefits in Himachal Pradesh. EBITDA grew 18.9% YoY to INR2.3b (est. of INR2.2b) and adj. PAT 7.9% to 1.4b (est. INR1.5b).We reduce our estimates 3-4% to bake in 3Q16 volume miss and higher tax rates. Sluggish market growth and heightened competition (especially from Patanjali) dilute near-term volume growth visibility and highlight risks to earnings. Maintain Neutral with a revised target price of INR980 (34x FY18E EPS). We reduce our estimates 3-4% to bake in 3Q16 volume miss and higher tax rates. Sluggish market growth and heightened competition (especially from Patanjali) dilute near-term volume growth visibility and highlight risks to earnings. Maintain Neutral with a revised target price of INR980 (34x FY18E EPS). For all recommendations, click here Disclaimer: The views and investment tips expressed by investment experts/broking houses/rating agencies on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.
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