Hold Colgate-Palmolive India; target of Rs 1250: ICICI Direct

ICICI Direct's research report on Colgate-Palmolive India

The company reported 7.2% YoY decline in revenue (5.2% growth on a comparable base) to | 1,091.7 crore (I-direct estimate: | 1,123.4 crore) with healthy volume growth of 4% aided by low base quarter CPIL maintained its leadership position with 53.4%, 44.8% market share in toothpaste, toothbrush categories, respectively. However, it is losing market share in toothpaste segment due to aggressive competition especially in ayurvedic and naturals toothpaste.

Outlook

We expect 11.3% CAGR in both revenue & earnings in FY18-20E. Going ahead, we believe Colgate will benefit from an expected normal monsoon and declining aggression from Patanjali in the category. We reiterate our HOLD rating with a target price of | 1250/share.