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Colgate Research

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Submitted By gautamagg
Words 7362
Pages 30
Result Update
July 26, 2014
Rating matrix
Rating Target Target Period Potential Upside : : : : Hold | 1672 12 months 2%

Colgate-Palmolive India (COLPAL)
Volumes slow but dominance prevails!!!

| 1632

What’s changed?
Target EPS FY15E EPS FY16E Rating Unchanged Changed from |41.6 to |41.7 Changed from |47.8 to |47.9 Unchanged

Quarterly performance
Sales EBITDA EBITDA (%) PAT Q1FY15 950.6 193.7 20.2 134.9 Q1FY14 YoY (%) 844.6 12.6 165.3 17.2 19.2 101 bps 185.2 -27.2 Q4FY14 QoQ (%) 920.6 3.3 201.9 -4.1 21.8 -153 bps 132.3 2.0

Key financials
| Crore Net Sales EBITDA PAT EPS (|) FY13 3,084.1 656.8 496.8 36.5 FY14 3,544.9 664.0 539.9 39.7 FY15E 4,122.9 805.7 567.7 41.7 FY16E 4,740.8 945.2 650.7 47.9

Valuation summary
P/E Target P/E Div. Yield Mcap/Sales RoNW (%) RoCE (%) FY13 44.7 45.8 1.7 7.2 101.5 125.2 FY14 45.1 42.1 1.7 6.3 90.0 102.2 FY15E 39.1 40.1 2.0 5.4 79.0 102.6 FY16E 34.1 34.9 2.2 4.7 74.0 98.8

Stock data
Particular Market Capitalization (| Crore) Total Debt (FY14) (| Crore) Cash and Investments (FY14) (| Crore) EV (| Crore) 52 week H/L Equity capital Face value Amount 22,194.1 0.0 287.0 21,907.1 1699 / 1190 | 13.6 Crore |1

Price performance
Colgate Dabur HUL Gillette

1M 8.9 4.6 4.1 6.9

3M 12.8 9.3 7.8 19.5

6M 25.8 19.1 13.5 6.7

12M 11.5 11.4 -9.4 1.0

Analyst
Sanjay Manyal sanjay.manyal@icicisecurities.com Parineeta Rajgarhia parineeta.rajgarhia@icicisecurities.com

• Colgate Palmolive reported slightly lower-than-expected revenue growth at 12.6% to | 950.6 crore (I-direct estimate: | 960.5 crore) on the back of lower volume growth of 5% vs. expectation of ~8% • Margins, however, were higher-than-expected at 20.2% (I-direct estimate: 18.9%) aided by lower raw material and employee expenses • Market share (January-June 2014) in toothpaste increased to 57% vs. 55.9% YoY while in toothbrush it increased to 42.6%

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