Colgate Palmolive Q1 Review: JPMorgan, HSBC Cut Target Price

Brokerages took a cautious stance on Colgate Palmolive India Ltd., post first quarter results. While JP Morgan maintained "overweight" with the target price cut to Rs 2,625 from Rs 2,750, HSBC maintained "hold" with the target price cut to Rs 2,600 from Rs 2,700.

JPMorgan highlighted that Colgate was navigating a tough H1, and expected back-ended recovery in H2. "Higher trade promotion led to muted price growth in Q1 and we expect this to return to positive territory in H2 with some stability in the competitive scenario, anniversarisation of prior promotions and faster premium segment growth," it added.

The brokerage noted that volume growth pace should improve in H2FY26, and it expected Ebitda margins to hold out at 32-33%.

"We have reduced FY26-27E EPS estimate by approximately 6%, mainly due to lower revenue forecasts," it added.

HSBC maintained a "hold" rating due to what it termed as tepid growth outlook. "The brokerage continues to value Colgate using a target P/E multiple of 45 times and roll forward our valuation base to June 2027 to derive a target price of Rs 2,600." HSBC said their target price implies a 9% upside.

HSBC noted that moderation more than anticipated. "Colgate expects a gradual recovery in H2FY26," it added.

The brokerage expected improvement, but structural growth potential remained low. "Urban mass demand remains weak, which is partially to blame for the tepid revenue growth," it added.

HSBC said there was an element of rising channel margins, impacting gross margins. "Future growth will likely be volume and mix driven as pricing gains may be difficult in a competitive environment," it noted.