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 October 24, 2025.

Broker Research

October 24, 2025 / 10:31 IST

sell

26 Aug, 2025 12:21

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ICICI Securities research report on Colgate Palmolive

Colgate’s Q2FY26 result reaffirms that business remains structurally fatigued, with no visible triggers for a turnaround. Revenue declined 6.2% YoY, implying a 7-8% volume decline amid GST-led destocking and continued competitive intensity. The fact remains, a category leader in daily-use essential(s) continues to lose momentum, with innovation and premiumisation failing to drive any meaningful recovery. In Q2, HUL’s oral care declined marginally while Dabur’s share grew in high single digit, indicating Colgate’s market share loss. Despite softer input costs and disciplined spends, growth inertia persists, pointing to deeper brand and category stagnation. With no meaningful diversification beyond oral care and earnings still reliant on price and mix, the risk of continued category stagnation remains high. Valuation at ~40x Sep’27E P/E leaves little room for patience. SELL.

Outlook

We cut our earnings estimates by ~6%/8% for FY26-27E, modelling revenue / EBITDA / PAT CAGR of 5 / 6 / 5 (%) over FY25-28E. At 40x P/E for Sep’27E, we maintain SELL on the stock with a DCF-based target price of INR 1,800.

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