Hold Colgate Palmolive; target of Rs 1245: Prabhudas Lilladher

Prabhudas Lilladher's research report on Colgate Palmolive

CLGT sustained positive volume growth for 5th consecutive quarter and sustained market share (52.5% for April Dec and April Sept2018) aided by higher consumer and trade promotions. Colgate CDC, Max fresh and Swarna Vedshakti is growing well and Colgate Total gaining momentum post its relaunch. Colgate is showing early signs of faint revival with stabilization of market share in Total. Dabur continues to grow ahead of market while Patanjali's recent aggressiveness makes sustained market share gains look uncertain as of now.

Outlook

We estimate 6% volume growth and 12% PAT CAGR over FY19-21. We value the stock at 36xFY21 EPS and assign a target price of Rs1245 (earlier 1157 at 35xSept20 EPS). Retain "Hold".