Prabhudas Lilladher downgrades Colgate Palmolive to reduce, target price of Rs 1,159

Prabhudas Lilladher has downgraded the ratings of Colgate Palmolive from hold to reduce in the long term with a target price of Rs 1,159. Shares of Colgate declined 2.01% to Rs 1,248.75 on Tuesday while BSE Sensex plunged 769.88 points to 36,562.91.

Company Finacials

For the quarter ended 30-06-2019, the company has reported standalone sales of Rs 1075.99 crore, down -6.16 % from last quarter sales of Rs 1146.63 crore and up 4.11 % from last year same quarter sales of Rs 1033.55 crore The company has reported net profit after tax of Rs 169.11 crore in latest quarter.


Investment Rationale

Prabhudas cited the decline in Colgate Palmolive's market shares and slowdown in toothpaste segment for the downgrade. The brokeage believes Colgate will continue to trade at a discount to peers due to single category dependence and sustained loss of share in key category. They value the stock at 35 times June 21 EPS.