Colgate-Palmolive's India unit beats Q4 profit view on price hikes

Colgate-Palmolive (India)

12/05/2023 13:03

BENGALURU/CHENNAI, May 12 (Reuters) - Colgate-Palmolive
(India) Ltd's  COLG.NS  fourth-quarter profit fell less than
expected, helped by price hikes implemented to combat surging
costs. 
    The Indian arm of the U.S. consumer goods major reported a
2.3% fall in net profit to 3.16 billion rupees ($38.64 million)
for the quarter ended March 31.
    Analysts, on average, had expected a profit of 2.71 billion
rupees, according to Refinitiv IBES.
    The net profit includes a one-time tax reversal, barring
which it had risen nearly 9%.
    The toothpaste maker's sales rose nearly 4% to 13.42 billion
rupees, with analysts attributing it to price hikes. Total
expenses were up nearly 3%.
    The company raised prices to combat increasing costs, a move
also made by peers such as Dabur India Ltd  DABU.NS , Hindustan
Unilever Ltd  HLL.NS , and Nestle India Ltd  NEST.NS .
    Toothpaste posted high-single-digit percentage sales growth,
helped by the launch of higher-priced products even as the
broader category struggled in rural areas, according to
Colgate-Palmolive India CEO Prabha Narasimhan.
    Colgate-Palmolive India's better-than-feared earnings come
after it had reported a drop in profit in two of the prior three
quarters. 
    Its parent company raised its full-year organic sales
forecast last month, betting on consistent price hikes and
steady demand for its pet nutrition products under the Hill's
Pet Nutrition brand.      
    Consumer goods makers in India are likely set up for further
sales gains in the April-June quarter as well, with a Reuters
poll of economists finding India's consumer inflation likely
cooled to an 18-month low in April due to a moderation in
prices.
    However, they have reported mixed earnings for the March
quarter so far: toothpaste-maker Dabur posted shrinking margins,
while Pepsi-bottler Varun Beverages  VARB.NS  recorded profit
growth.
    Shares of Colgate-Palmolive India fell nearly 2% in the
January-March quarter against an almost 4% rise in the Nifty
FMCG Index  .NIFTYFMCG . 
    
($1 = 81.7800 Indian rupees)

 (Reporting by Varun Vyas in Bengaluru and Praveen Paramasivam
in Chennai; Editing by Janane Venkatraman
)
 ((varunvyas.hebbalalu@thomsonreuters.com;))