Colgate-Palmolive's Premium Push To Playout In Long-Term Only: Prabhudas Lilladher

Prabhudas Lilladher Report

Colgate-Palmolive India Ltd.'s analyst meet 2023 largely focused on the growth opportunities in the oral care category and resolve to grow personal care franchisee under Palmolive brand, although no specific details beyond hand and body wash has been shared.

Colgate’s reiterated four growth pillars as-

1. lead toothpaste category growth,

2. premiumisation through science-based innovations,

3. lead category growth in toothbrush and devices and

4. build personal care portfolio in body/hand wash.

Colgate is looking at-

1. premiumisation in toothpastes with 14% above 110 average selling price,

2. support brands with increased ASP and

3. increase presence in personal care (face and hand wash).

We believe launch of premium products like Total Sensitive toothpaste, Colgate water flosser, Visible white O2 toothpaste and Whitening Pen and Colgate Periogard Toothpaste will benefit in long term only.

We estimate sales/profit after tax compound annual growth rate of 7.8%/12.6% over FY23-25.

We believe favorable financial parameters (38.7 times June-25 earnings per share, 2.2% dividend yield, 85% plus payout and ~90% return on capital employed) limit downside.

Retain 'Hold' with target price of Rs 1869 (38 times March-25 EPS).

Click on the attachment to read the full report:

DISCLAIMER

This report is authored by an external party. BQ Prime does not vouch for the accuracy of its contents nor is responsible for them in any way. The contents of this section do not constitute investment advice. For that you must always consult an expert based on your individual needs. The views expressed in the report are that of the author entity and do not represent the views of BQ Prime.

Users have no license to copy, modify, or distribute the content without permission of the Original Owner.