Colgate-Palmolive Q2 Review: Profit Drops 17%, Brokerages Turn Bearish, Cut Target Price

Colgate-Palmolive (India) Ltd. reported a 17% year-on-year decline in net profit to Rs 327.50 crore for the quarter ended September. Revenue dropped 6.2% to Rs 1,519.50 crore, while Ebitda fell 6% with margins contracting slightly to 30.6%. Following the subdued performance, brokerages including Citi, Investec, and Jefferies revised their target prices, with mixed outlooks on the company's near-term growth prospects.

Colgate Palmolive Q2 Highlights (YoY)

• Revenue down 6.2% to Rs 1,519.50 crore versus Rs 1,619.11 crore.

• Net Profit down 17% to Rs 327.50 crore versus Rs 395.05 crore.

• Ebitda down 6% to Rs 465.43 crore versus Rs 497.35 crore.

• Margin at 30.6% versus 30.7%

Notably, Colgate announced first interim dividend of Rs 24 per equity share for the fiscal 2026. The company announced distribution of nearly Rs 652.8 crore to shareholders.

Citi On Colgate

• Maintain Sell and cut target price to Rs 2,100 from Rs 2,175

• Weak Q2 -Tough Operating Environment, GST-Led Disruption

• Expect gradually improving growth trajectory near-term

• LUP structure is likely to offer near-term boost to volumes

• Remain cautious on its sustained impact for HPC categories

• Consumer behavior may shift towards reduced purchase frequency rather than heightened consumption

• 41 times 1-year forward consensus P/E, the risk-reward is unfavourable.

Investec On Colgate

• Maintain Sell and cut target price to Rs 2,279 from Rs 2,366

• Subdued performance

• Revenue falls on GST impact, high base

• EBITDA margin stays under pressure on operating deleverage

• Overall weakness in performs drives further EPS cuts

Jefferies On Colgate

• Maintain Buy with target price of Rs 2,700

• Expectedly Weak Quarter

• Management blamed transitory issues related to GST rate cut

• This resulted in destocking across the value chain, along with a high base

• Premium portfolio, however, performed well, per mgmt.

• Cut EPS by 4-5% - the stock will stay rangebound until there is a growth pickup

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