Colgate-Palmolive India Q4 Results: Profit Rises 20%, Beats Estimates

Colgate-Palmolive India Ltd.’s profit rose in the fourth quarter of fiscal 2024, beating analysts' estimates, aided by price hikes and higher demand for toothpastes.

The net profit of the namesake toothpaste-maker increased 20% over the previous year to Rs 380 crore in the quarter-ended March 2024, according to an exchange filing. That compares with the Rs 359.79-crore consensus estimate of analysts tracked by Bloomberg.

Colgate Palmolive Q4 FY24 Highlights (YoY)

• Revenue increased 10.4% to Rs 1,481 crore (Bloomberg estimate: Rs 1,468.13 crore).

• Ebitda rose 18% to Rs 523 crore (Bloomberg estimate: Rs 504.2 crore).

• Margin expanded to 35.3% versus 33% despite a sharp ramp-up of ad spends (Bloomberg estimate: 34.3%).

• Cost of raw materials consumed rose 7.4% to Rs 387.72 crore.

• Marketing expenses, which rose 18% on the back of new product launches and advertising campaigns, resulted in a 6.2% increase in total expenses. Ad expenses stood at 11.3% of net sales.

Domestic sales grew by 10.7% for the quarter on the back of "strong performance" in toothpaste, according to the company. The rural market displayed positive signs of demand recovery, outperforming urban.

For the full fiscal ended March 31, 2024, Colgate's net sales grew 8.8% over the previous year to Rs 5,644.2 crore. Its domestic sales rose 9.5%, driven by double-digit growth in the toothpaste category, the company said.

Colgate has been unlocking growth through strategic objectives such as growth acceleration in core portfolio, premiumisation through science-based innovation, driving category growth in toothbrush and building personal care category. The company has relaunched Colgate Active Salt with a stronger formula and introduced a cheaper 80g pack for its leading toothpaste, Colgate Total. It also launched new fragrances for Palmolive body wash along with its first mass media campaign.

Margin delivery was aided by cost initiatives, such as 'Funding The Growth' programme, the company said. Colgate has also entered into an innovative communication tie-up with IPL, with renewed focus on Brushing at Night.

Among peers, Dabur India Ltd. saw 22% growth in oral care over the previous year on a negative base (-3%). Hindustan Unilever Ltd. also delivered double-digit broad-based value growth in oral care driven by pricing and as the category is seeing recovery. Although the country's largest consumer goods maker missed quarterly earnings estimates.

"In the coming year, we are optimistic seeing the market recovery, the continued strengthening of our very strong brand and a robust innovation pipeline," said Prabha Narasimhan, managing director and chief executive officer of Colgate-Palmolive (India) Ltd. It is preparing to launch a first-of-its-kind tooth-whitening booster under the 'Visible White' range.

The board has announced a second interim dividend of Rs 26 per share, along with a special one-time interim dividend of Rs 10 per share due to the company's outstanding performance in the financial year 2024.

Shares of Colgate Palmolive closed 1.5% lower on Tuesday, as against a 0.5% gain in the benchmark Nifty 50.