Hold Colgate-Palmolive (India); target of Rs 1690: ICICI Direct

ICICI Direct's research report on Colgate-Palmolive (India)

Colgate-Palmolive (India) (CPIL) is the largest oral care company in India. The company has more than 50% market share in the toothpaste category. The major brands include Colgate Dental Cream, Colgate Total, Colgate Max-Fresh. With the changing consumer preference for naturals products, the company is focusing on growing Colgate Vedshakti brand. Recently, it has launched toothpaste for Diabetics, Colgate Visible White O2, Palmolive range in face cleansing category • Colgate has distribution reach of 6.5 million outlets. The company commands one of the highest gross margins in the industry and spends ~13% of sales on marketing to support existing brands and new launches.

Outlook

We maintain our Hold rating on the stock. We value the stock at Rs1690, valuing the business at 38x FY24 earnings.