Colgate-Palmolive Q2 Review: Profit Drops 17%, Brokerages Turn Bearish, Cut Target Price
Brokerages including Citi, Investec, and Jefferies revised their target prices, with mixed outlooks on the company's near-term growth prospects.
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.
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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
