BSE Code: | NSE Code: | ISIN: | Sector:
Research Report Detail
|Report Date||Call||Price@Call||Target Price
|Current Status||Time Horizon|
|Open|| Long (1Y)
Nomura maintains buy on Colgate Palmolive India
1QFY18 results were ahead of our and street expectations. We had
expected the company to be hit hard by GST-related de-stocking, given
the steep tax rate changes and resultant price cuts. However, against
our expectation of a high-single-digit volume decline, the company's
reported volumes were down only 5% y-y. Margins, both at gross and
EBITDA level, also surprised positively.
We expect Colgate's growth trajectory to pick up sharply given the: a) low base effect, b) recent 8-9% price cuts across the portfolio, and c) strong innovation pipeline. Consequently we lift estimates by 3.9% and 4% for FY18F and FY19F to account for the strong growth and the EBITDA margin beat in Q1FY18.