Colgate Q2 Review: Motilal Oswal Maintains 'Buy' Despite Muted Show, Sees 25% Upside — Here's Why

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Motilal Oswal Report

We largely maintain our EPS estimates for FY26/FY27. Colgate-Palmolive India Ltd.’s performance has been relatively weak over the past three-four quarters, marked by muted revenue growth and margin contraction. However, following the implementation of GST 2.0, which reduced the GST rate on toothpaste from 18% to 5%, benefiting nearly 95% of the company’s portfolio, we believe Colgate is well-positioned for a recovery in the coming quarters, supported by improving demand trends.

Colgate remains focused on driving sustainable revenue growth through multiple levers —

1. launching science-backed, premium innovations to enhance realizations,

2. expanding category reach through increased marketing and consumer education,

3. deepening rural penetration to drive frequency and new user addition, and

4. broadening its presence in personal care to reduce dependence on the slower-growing oral care category.

The stock has corrected ~30% over the past 12 months and is trading at a comfortable valuation of 45 times and 40 times P/E for FY26 and FY27, respectively. We maintain Buy rating on the stock with a target price of Rs 2,850 (45x Sep’27).

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