Sell Colgate-Palmolive (India), target price Rs 1489: Centrum Broking

Centrum Broking has sell call on Colgate-Palmolive (India) with a target price of Rs 1489. The current market price of Colgate-Palmolive (India) is Rs 1533.8. 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 41615.16 Crore) operating in FMCG sector.

Colgate-Palmolive (India) Ltd. key Products/Revenue Segments include Personal Care, Service Income and Scrap for the year ending 31-Mar-2021.



Financials
For the quarter ended 31-12-2021, the company reported a Standalone Total Income of Rs 1285.80 Crore, down -5.38 % from last quarter Total Income of Rs 1358.93 Crore and up 3.54 % from last year same quarter Total Income of Rs 1241.81 Crore. Company reported net profit after tax of Rs 252.33 Crore in latest quarter.

Investment Rationale
Though Ram was instrumental in improving CP India’s profitability, and arrest decline of toothpaste market share, Prabha’s announcement came as a surprise as Ram has spent less than 3 years in CP India.In addition, the brokerage saw the attempts made by the company launching bathing soaps and Halo shampoo had limited success. Hence the brokerage expects Prabha would bring in those expertise and aggression in building non-oral-care portfolio for the company. However, it remains cautiously positive until it sees meaningful market share gains in the core toothpaste portfolio. It retains Sell rating at this time with a DCF-based Target Price of Rs1,489 (implied 32.9xFY24E EPS).



Promoter/FII Holdings
Promoters held 51.0 per cent stake in the company as of 31-Dec-2021, while FIIs owned 18.02 per cent, DIIs 8.16 per cent.