Hold Colgate Palmolive; target of Rs 1046: Edelweiss

Edelweiss' research report on Colgate Palmolive

Colgate Palmolive’s (Colgate) Q4FY17 revenue and EBITDA growth of 2.2% and 1.2% YoY, respectively, and PAT decline of 0.5% YoY came in line with our estimates. Volumes though declined 3% YoY, recovered from 12% YoY dip in Q3FY17.

Outlook

Colgate’s innovation funnel and brand investments will persist, which will help arrest share loss, but impact margins in short term. At CMP, the stock is trading at 34.2x FY19E EPS. We maintain ‘HOLD/Sector Performer’ with target price of INR 1,046.