Sell Colgate Palmolive; target of Rs 1800: ICICI Securities

ICICI Securities is bearish on Colgate Palmolive has recommended sell rating on the stock with a target price of Rs 1800 in its research report dated May 22, 2025.

Broker Research

May 22, 2025 / 14:51 IST

sell

26 Aug, 2025 12:21

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ICICI Securities research report on Colgate Palmolive

We've been long critical of Colgate India's (consistent) strategy of (1) not investing (enough) for toothpaste category growth (our opinion), (2) not aggressive (enough) in diversifying outside of oralcare (parent has a good HPC portfolio though), (3) over-earning, in our opinion (operating margins at ~37% after adding back royalty). Disappointing Q4FY25 is just the beginning (revenue declined 2% YoY) of a prolonged winter. In the near-past, it has pursued a price-hike driven revenue growth strategy, which we have always believed to be unsustainable (reminds us of ~2010 era in Nestle India).

Outlook

At 45x FY27E P/E, we reckon stock has the potential to derate (further meaningfully) to 30x, despite 12% underperformance vs. Nifty (last 12 months). Downgrade to SELL (from Hold) with a TP of INR 1,800.

For all recommendations report, click here