(Rating: ADD, TP: Rs1,892, Upside: 10.0%)
- View - We build in 8.3%/7.5% revenue/PAT CAGR for the company over FY21-24E expecting an improvement in growth trajectory from the 4.6% seen from FY16-21 with margins settling slightly below current levels. The increased dividend payouts have also led to a sharp improvement in return ratios and should act also support valuations. We roll over our valuations to FY24E and maintain an ADD rating with a PT of Rs 1,892 based on 40x FY24E earnings, in-line with its 5-yr average multiple. Market share getting back above 50% and strong scale-up in new launches should be the key positive triggers for the stock. Key risks would be further loss of market share in oral care to Dabur or HUL and failure to move up the overall growth trajectory
- Financial summary - Revenue grew 12% on a base of 4% decline indicating volume growth of ~8%, revenue 2-yr CAGR at 3.7% and volume is flat on 2-yr basis, gross margins expanded 300bps due to price hikes & better product mix while EBITDA margins up were only 90bps given a sharp increase in adspends, PAT growth of 18%.
- Quarter highlights - While volume growth was subdued on weak base of 7% volume decline, CLGT witnessed broad based growth across all categories and ~4% price hike & better product mix aided GM expansion. Adspends increased 40%/7.6% YoY/QoQ as company upped marketing investments in both its core portfolio and new launches.
Shares of COLGATE-PALMOLIVE (INDIA) LTD. was last trading in BSE at Rs. 1704.25 as compared to the previous close of Rs. 1709.1. The total number of shares traded during the day was 17404 in over 2262 trades.
The stock hit an intraday high of Rs. 1737.55 and intraday low of 1670.15. The net turnover during the day was Rs. 29461844.