Girish Pai of Nirmal Bang Institutional Equities told CNBC-TV18, "In Colgate Palmolive earnings growth could be fairly strong. We think it could be delivering earnings growth of somewhere close to 20 percent compounded over the next two to three years largely driven by a few factors. While it has got a fairly large market share within the oral care segment, it continues to gain market share largely because it has got a fairly diversified product portfolio. There is a premuimisation play going on out there. It has been spending very high on advertising and promotions; almost 20 percent of sales has been spent on advertising and promotions."
"Sales growth could be between 13-15 percent and you could see advertising and promotions come off as percentage of sales. So, that is going to drive margin expansion and the earnings story as far as Colgate is concerned. Obviously return on equities (RoE) and return on capital (ROCs) of this company have been extremely good," he said.
"So, from a valuation standpoint at something like 30 times FY17 it looks like a value buy within MNC consumer place. We think that there could be some good returns that could come the investors' way at this point in time."
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