Buy Colgate-Palmolive (India), target price Rs 1900: ICICI Direct

ICICI Direct has buy call on Colgate-Palmolive (India) with a target price of Rs 1900. The current market price of Colgate-Palmolive (India) Ltd. is Rs 1747.55. Time period given by analyst is one year when Colgate-Palmolive (India) Ltd. price can reach defined target.

Colgate-Palmolive (India) Ltd., incorporated in the year 1937, is a Large Cap company (having a market cap of Rs 47461.49 Crore) operating in FMCG sector.

Financials
For the quarter ended 31-03-2021, the company reported a Standalone Total Income of Rs 1289.81 Crore, up 3.87 % from last quarter Total Income of Rs 1241.81 Crore and up 18.23 % from last year same quarter Total Income of Rs 1090.90 Crore. Company reported net profit after tax of Rs 314.66 Crore in latest quarter.


Investment Rationale
Colgate is expected to post 15.2% revenue growth in Q1FY22E on the back of sales decline in base quarter. The company witnessed 4.1% revenue decline in the base quarter. On a two year CAGR basis, growth is expected to be 5.2%. Though the brokerage believes second wave of pandemic would have impacted sales, to a certain extent, the impact would not have been as adverse as last year. It expects 114 bps operating margin improvement to 30.7% largely on the back of gross margin expansion. Net profit is likely to grow 22.2% to Rs 242.1 crore.

Promoter/FII Holdings
Promoters held 51 per cent stake in the company as of March 31, 2021, while FIIs held 16.9 per cent, DIIs 10.3 per cent and public and others 21.8 per cent.