Time period given by analyst is one year when Colgate-Palmolive (India) Ltd. price can reach defined target.
Colgate-Palmolive (India) Ltd., incorporated in the year 1937, is a Large Cap company (having a market cap of Rs 42019.06 Crore) operating in FMCG sector.
Colgate-Palmolive (India) Ltd. key Products/Revenue Segments include Personal Care, Service Income and Scrap for the year ending 31-Mar-2021.
Financials
For the quarter ended 30-06-2021, the company reported a Standalone Total Income of Rs 1171.18 Crore, down -9.20 % from last quarter Total Income of Rs 1289.81 Crore and up 11.87 % from last year same quarter Total Income of Rs 1046.90 Crore. Company reported net profit after tax of Rs 233.23 Crore in latest quarter.
Investment Rationale
Colgate’s Q2FY22 net revenue and EBITDA were below estimates. Net revenue grew by 5% YoY (HSIE 8%), +5% two-year CAGR (similar trajectory achieved in the past four quarters). Volume growth was ~2% YoY (HSIE 5%) and 2.5% on two-year CAGR. Its go-to-market approach continues to see adoption of new business models and approaches as it expands its brands across different platforms. Overall penetration trends remain strong and are favourable quarter on quarter. Gross margin contracted by 130/232bps YoY/QoQ to 67%, after expanding for the past four quarters. While the company took price hikes at the end of the quarter, their impact was not visible. A&P grew by 13/16% YoY/QoQ in Q2FY21, while employee/other expenses were up 8/4%. EBITDA margin contracted by 221bps YoY to 29.6% (+541bps in Q2FY21, +87bps in Q1FY22) vs. HSIE 31%. The brokerage cuts EPS estimates for FY22/FY23/FY24 by 1-2%. It values Colgate at 42x P/E on Sep-23E EPS and derive a target price of INR 1,800.
Promoter/FII Holdings
Promoters held 51 per cent stake in the company as of 30-Sep-2021, while FIIs owned 19.14 per cent, DIIs 7.41 per cent.
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