Colgate Palmolive India's Q3 profit misses estimates on moderating demand

Godrej Consumer Products

28/01/2025 10:59

Jan 28 (Reuters) - Colgate Palmolive (India)  COLG.NS  reported a third-quarter profit that came in below
market estimates on Tuesday, hurt by dwindling demand from urban consumers and higher expenses.
    The toothpaste maker's net profit fell 2.2% to 3.23 billion rupees ($37.3 million) in the quarter ended Dec. 31,
missing analysts' average estimate of 3.33 billion rupees, according to data compiled by LSEG.
    Revenue from operations rose 4.7% to 14.52 billion rupees. However, the company's total expenses surged by 8.2%,
offsetting the sales growth.
    
    KEY CONTEXT
    Colgate's volume growth in the toothpaste category is slowing down in urban areas, while acceleration of growth
in the rural segment is tapering off, analysts have said.
    As a result, it has amped up marketing and promotional spend to increase sales and drive market share in a
country where only 50% of rural customers brush every day, the company has said. This has kept margins range-bound,
according to analysts. 

PEER COMPARISON 
                                   Valuation (next 12  Estimates (next 12    Analysts' sentiment
                                   months)             months)               
                        RIC        PE      EV/EBITDA   Revenue     Profit    Mean      # of      Stock to  Div yield
                                                       growth (%)  growth    rating*   analysts  price     (%)
                                                                   (%)                           target**  
 Colgate-Palmolive       COLG.NS   46.08   32.26       9.10        11.39     Hold      28        0.89      1.82
 (India) Ltd                                                                                               
 Hindustan Unilever      HLL.NS    49.03   34.09       6.60        8.14      Buy       19        0.91      1.82
 Ltd                                                                                                       
 Dabur India Ltd         DABU.NS   43.50   33.44       8.75        12.08     Buy       38        0.87      1.05
 Godrej Consumer         GOCP.NS   46.03   33.22       8.91        20.71     Buy       33        0.84      1.77
 Products Ltd                                                                                              
             
* The mean of analyst ratings standardised to a scale of Strong Buy, Buy, Hold, Sell, and Strong Sell
** The ratio of the stock's last close to analysts' mean price target; a ratio above 1 means the stock is trading
above the PT
    
 OCTOBER TO DECEMBER STOCK PERFORMANCE
 
    
    -- All data from LSEG
    -- $1 = 86.5290 rupees

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Colgate Palmolive Stock Performance    https://tmsnrt.rs/4azYoWH
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 (Reporting by Ananta Agarwal in Bengaluru; Editing by Savio D'Souza)
 ((Ananta.agarwal@thomsonreuters.com;))