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ICICI Securities Report
While Colgate-Palmolive India Ltd.’s revenue and profit growth beat peers (price/mix +8%, volumes +2%, albeit on a low base), it's still underwhelming.
At ~70% gross margin and more than 35% adjusted Ebitda margin, it is over-earning, though the basic product (white toothpaste with the highest salience in its portfolio) is a functional product.
Bringing focus back on brushing twice may drive per capita consumption though it has failed in the past to do so.
Relaunches of products with superior quality, launch of access packs and expected launch of global toothpaste variants are steps in right direction.
However, market share losses to naturals segment (with continuous price hikes) is a key risk.
Focusing and growing core plus diversification is a tough ask. At 48 times price/earnings FY26E, downgrade to Hold (Add earlier).
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