Colgate-Palmolive will report its third-quarter earnings on Thursday and the company is expected to report good set of numbers later in the day.
- The stock, from its Q2 levels of roughly around Rs 1,050, has gained about 25 percent. it is trading at a record high. Trading at 42 times one year forward earnings but this is at a discount to other fast moving consumer goods (FMCG) players but then again for Colgate it hasn’t shown that sort of growth.
- In the previous quarter, the market share decline was arrested after nine quarters of declines. Secondly, the company did a management change as well towards the end of August, brought in old hand, Mukul Deoras as the chairman and then finally they have increased the distribution of their naturals business which is the Vedshakti product to the larger part of the country. All this coinciding with slightly less competitive intensity or less acceptance of Patanjali products should help Colgate. Whether the market share comes by or not will be the key monitorable.
- Revenue growth of 8 percent is on the cards, EBITDA growth of about 6.5 percent, which is about Rs 300 crore is on the cards. 27 percent in terms of margins and net profit growth on the back of that about 5.2 percent, so three key numbers to remember.
- The key number to watch out for will be the volume growth. The street is working with a volume growth of about 5-6 percent.