Sharekhan's research report on Colgate-Palmolive (India)
Colgate Palmolive (India) Limited’s (Colgate’s) Q3FY2024 performance was beat on all fronts with 557 bps y-o-y expansion in OPM to 33.6% leading to 36% y-o-y growth in adjusted PAT to Rs. 330 crore; revenues grew by 8.1% y-o-y to Rs. 1,396 crore. Surge in OPM led to a 30% y-o-y growth in adjusted PAT in 9MFY2024. We expect operating profit to shrink in FY2025 on a high base and hence earnings growth will be largely driven by revenue growth. Volume growth in toothpaste stays in low single digit. Any rise in volume growth with market share gains and better consumption on revamped strategies will drive growth.
Outlook
Stock trades at 50x/46x its FY2025E/FY2026E EPS. We maintain a Hold with a revised PT of Rs. 2,596.
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