Colgate Palmolive shares fall nearly 4% today after Q2 results, brokerages divided; should you buy or sell?

Colgate-Palmolive (India)

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26 Aug, 2025 12:21

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Colgate Palmolive (India) Ltd shares fell as much as 3.8 percent in the morning trade on Friday, after the oral care company reported a 17 percent year-on-year decline in September quarter (Q2 FY26) net profit to Rs 327.5 crore, in line with expectations. The stock fell to a low of Rs 2,200 on NSE, against the previous day's closing price of Rs 2,286.9.

Brokerages have issued mixed calls on the stock, ranging from Buy to Sell, as analysts remain divided on the pace of recovery for Colgate Palmolive India. While some see margins holding steady and expect gradual improvement in the second half as GST-related disruptions fade, others flag weak volume trends, high competitive intensity, and limited near-term triggers for growth.

Quarterly performance

Revenue fell 6.2 percent year-on-year to Rs 1,519.5 crore, slightly below estimates, while EBITDA declined 6.6 percent to Rs 464.5 crore. Operating margin, however, remained stable at 30.6 percent. Sequentially, sales rose 6 percent from the previous quarter, signalling early signs of normalisation.

• Also read | Colgate Q2 results: Net profit down 17% at Rs 328 crore

Colgate said the GST rate cut on oral care products led to temporary destocking at distributors and retailers, affecting performance during the quarter. CEO Prabha Narasimhan said the company expects a gradual recovery in the second half of the year. The board declared an interim dividend of Rs 24 per share for FY26, payable from November 19.

Brokerage views on Colgate stock

• Citi has a Sell call on Colgate Palmolive India stock with a target price of Rs 2,100 per share, noting that Q2 revenue and EBITDA fell 6 percent year-on-year due to GST-related destocking and a high base. It said competitive intensity remains elevated but expects a gradual recovery in the second half on easier comparisons and benefits from lower unit packs (LUP).
• CLSA has a Hold rating with a target of Rs 2,130, saying the company missed estimates across metrics with sales down 6.3 percent year-on-year. It said margins expanded but were offset by weak topline performance, prompting a 4 percent cut in FY26-28 earnings estimates.
• Nomura has a Reduce call with a target of Rs 2,200, citing an 8.5 percent year-on-year decline in volumes and a 6.3 percent drop in sales. It said margins were stable and gross profit margin improved on lower input costs, but negative operating leverage limited profitability. A mild recovery is expected in the second half.
• Jefferies has a Buy call with a target of Rs 2,700 per share, noting that revenues, EBITDA, and earnings all declined again in Q2 as GST rate cuts led to destocking. It said the premium segment remained resilient and expects the stock to stay rangebound until growth picks up.
• Nuvama issued a Buy rating but cut its target price to Rs 2,870 per share. It described Q2 as weak but broadly in line, with revenue down 6.2 percent year-on-year due to GST impact and a high base. Toothpaste volumes were down about 4 percent, while gross profit margin rose 91 basis points year-on-year. The brokerage said Colgate’s oral care performance was slightly weaker than HUL’s but ahead of Dabur’s.
• I-Sec shared a Sell call with a target of Rs 1,800 per share, saying the Q2 results confirmed structural weakness with revenue down 6.2 percent and volume down 7-8 percent year-on-year. It said innovation and premiumisation have yet to deliver results, and valuations at 40 times FY27 earnings leave limited upside potential.

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