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Colgate-Palmolive (India) on Thursday reported a 3.64 per cent rise in profit at Rs 199.1 crore. The FMCG firm had posted a profit of Rs 192.1 crore in the same quarter last year. Phillip Capital maintained ‘Sell’ on Colgate Palmolive with a target price of Rs 1,395.
The third quarter of FY20 was the 19th straight quarter of sub-10 per cent topline growth for Colgate.
“Colgate Q3FY20 results were marginally below our estimates due to lower-than-expected volume growth, loss of market share in toothbrush segment and higher A&P spends (up 14 per cent YoY). Colgate reported fourth consecutive quarter of abysmal volume growth and it was only 1 per cent on tonnage basis,” the brokerage house said.
On the other hand, Kotak Institutional Equities retained ‘Add’ rating on the stock with a revised target of Rs 1,600 (earlier Rs 1,700).
“Lower revenue growth as well as margin assumptions drive a 6-7 per cent cut in our FY20-22E EPS forecasts,” Kotak said.
Colgate’s income during the period under review stood at Rs 1,152.97 crore compared with Rs 1,107.26 crore in the year-ago period, a growth of 4.13 per cent.
Dabur India posted 8.62 per cent increase in consolidated profit at Rs 398.87 crore for the third quarter. The homegrown FMCG player had posted a consolidated profit of Rs 367.21 crore in October-December quarter a year ago.
The company’s domestic FMCG business reported an underlying volume growth of 5.6 per cent during the quarter, the company said in a statement.
HDFC Securities is bullish on Dabur India with a target price of Rs 510. “Rural growth outpaced urban by 400 basis points for Dabur (in contrast to the industry). Oral care growth at 8.5 per cent was much better than category growth and market leader (Colgate posted 4 per cent,” HDFC Securities said.
Revenue from operations rose 6.99 per cent to Rs 2,352.97 crore during the quarter under review against Rs 2,199.21 crore in the corresponding quarter of the previous fiscal.
HDFC Securities further added that Dabur has outperformed in a tough environment as its brand-building initiatives are beginning to pay dividends. “We remain optimistic for Dabur and expect it will be opportunistic in the rural recovery,” the brokerage house added.
Marico reported 9.96 per cent increase in profit at Rs 276 crore helped by gross margin expansions. It had posted a profit of Rs 251 crore in the year-ago period. However, sales dropped 1.98 per cent to Rs 1,824 crore in Q3FY20 over Rs 1,861 crore in Q3FY19.
“Marico’s Q3FY20 results were below our estimates on the revenue front, however, above our estimates on profitability front,” ICICIdirect said in a note. Brokerage will give target price for Marico post conference call which is scheduled on Friday at around 11.30 am.
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