FMCG major Colgate-Palmolive India posted a 54.1 percent growth in its net profit at Rs 314.6 crore for the quarter ended March 31, 2021, helped by higher sales. The company had posted a net profit of Rs 204.15 crore in the January-March quarter a year ago.
The company's net sales in Q4FY21 rose by 20.2 percent to Rs 1,275.01 crore as against Rs 1,062.35 crore in the year-ago period.
"Colgate’s 4Q result was better than expectations, aided by a strong recovery across its portfolio and peak quarterly operating margin delivery. A focused approach to expand category, drive premiumisation, and strengthen go-to-market has been working well and is likely to help accelerate top-line growth," global brokerage CLSA said.
The brokerage maintains an Outperform rating and raised its March 2022 target price to Rs 1,825 per share from Rs 1,800 per share.
Credit Suisse also maintained an Outperform call and raised the target price to Rs 1,850 per share.
"Colgate Palmolive reported solid revenue growth and strong margin expansion. It’s no longer underperforming the growth of other HPC companies," Credit Suisse said.
Yes Securities said that Colgate’s 4Q performance was strong on the margin front with both gross and EBITDA margins making new all-time highs while underlying volume growth still remains soft with growth driven by premiumisation and a better mix.
“While the company has turned more aggressive on new launches and entry into new oral care segments, more traction in these segments or entry into new categories would be required to pull up the growth trajectory from mid to high single digits,” Yes Securities said.
The brokerage assumes coverage on Colgate-Palmolive India with an 'Add' rating with a target price of Rs 1,782 per share.
Amarjeet Maurya - AVP - Mid Caps, Angel Broking, said that Colgate-Palmolive's overall 4Q results were in line with expectation. Hence, he is positive on the stock.
Citi, however, maintained a Sell rating but raised the target to Rs 1,550 per share.
It believes that this was another quarter in which the company lagged Dabur’s oral care growth and perhaps also HUL's.
At 9:50 am, the shares of Colgate-Palmolive India were trading 1.62 percent lower at Rs 1,570.20 apiece on the BSE.