Defying Headwinds with Sustained Growth
Colgate-Palmolive (India) Ltd (Colgate) makes oral and body care consumer products such as soaps, cosmetics, toilet preparations, toothpastes, toothbrushes, shaving brushes, and glycerin.
Key Highlights
In Q3FY25, consolidated revenue increased 4.7% YoY to Rs. 1,452cr, primarily driven by volume growth in the toothpaste segment, despite the relatively soft demand in the urban market.
Toothpaste segment reported mid-single-digit intrinsic volume growth, while tooth-brushes showed competitive growth, driven by science-backed innovations in the premium portfolio.
The company’s EBITDA for Q3FY25 stood at Rs. 454cr, down 3.0% YoY, while EBITDA margin decreased 250bps to 31.3%, primarily due to an increase in the cost of sales of 11.6% YoY.
The company’s profit after tax (PAT) for Q3FY25 stood at Rs. 323cr, as against Rs. 330cr in Q3FY24.
OUTLOOK & VALUATION
Colgate delivered a resilient performance in Q3FY25, with decent sales growth led by volume growth in the toothpaste segment. With a strong innovation pipeline, including new product launches and investments in artificial intelligence (AI)-generated dental screening reports and advertising, the company is well-positioned for long-term growth. Therefore, we upgrade our rating to ACCUMULATE from REDUCE on the stock, with a rolled forward target of Rs. 2,730, based on 43x FY27E adjusted EPS.