With input costs starting to rise again, Colgate now expects margins, both on a gross and Earnings Before Interest, Tax, Depreciation and Amortisation (EBITDA) level to normalise from the levels seen in financial year 2024.
Going forward, the company expects to see a balance between volume, and price mix going forward.
Colgate highlighted that it grew 2.4 times compared to peers in the first half of the current financial year, compared to the 1.6 times growth seen in the same period last year, which indicates gains in market share for the company. Its premium portfolio also grew at 3x the size of its base.
Colgate at its analyst day has listed out four key priorities for the company going forward:
- It intends to drive per capita oral care consumption in India.
- It plans to premiumise through science-led superior product portfolio.
- The company also intends to lead category growth in the Toothbrush segment through devices.
- and it also plans on building diversification through growth in Palmolive.
Brokerage firm Citi maintained its “sell” rating on Colgate-Palmolive India, with a price target of ₹3,000, stating that it expects the near-term earnings growth to moderate for the company, given the soft demand trends, advertising investments and high profitability seen in the base quarter.
On the flip side, Jefferies has a “buy” recommendation for the stock with a price target of ₹3,570. It said that the street concerns currently are on consumption trends with weakening urban growth and flattening rural growth.
Shares of Colgate-Palmolive India ended 2% higher on Wednesday at ₹3,011. As of Wednesday’s close, the stock has corrected nearly 23% from its recent peak of ₹3,890. The recent correction has trimmed the stock’s gains on a year-to-date basis down to 21%.
