Colgate Palmolive share price jumped more than 6% to a 52-week high on Tuesday after the company posted strong FY25 first-quarter earnings. Shares of Colgate rose as much as 6.20%, to ₹3,408.40 on the BSE.
Colgate Palmolive India posted a consolidated net profit of ₹364 crore in Q1FY25, up 33% compared to ₹273.68 crore in the previous year The company’s revenue for the June 2024 quarter grew 13% from ₹1,314.7 crore per annum ( YoY) to ₹1,485. 8 crore It happened.
The company saw consistent growth in the rural market in the third quarter, outperforming growth in the urban market in the second quarter.
Prabha Narasimhan, managing director & CEO of Colgate-Palmolive, said the company’s toothpaste division achieved double-digit growth with single-digit average growth.
Operating performance also improved as EBITDA in Q1FY25 grew 21.5% YoY to ₹508.3 crore, while EBITDA margin expanded 240 basis points (bps) to 34%.
Analysts raised their target price on shares of Colgate Palmolive after strong Q1 results but believe the current stock price is priced at the most near-term stimulus and limited upside.
Here’s what brokers have to say about Colgate Palmolive’s Q1 results and shares of Colgate Palmolive:
Emkay Global
The new leadership has improved the fortunes of Colgate India, and the company’s flagship oral service segment initiatives have borne fruit. The company dealt with the first problem, the low, high growth in toothpaste sales in Q1FY25. This brings us to the second important factor, diversifying industries. According to Nitin Gupta, senior research analyst at EmK Global Financial Services Ltd, “Improved performance has seen us grow 2-3% from FY25-27E and deliver a target valuation multiple of 41x to 45x.”
Despite limited efforts to diversify, EmK Global is currently looking at single-digit growth over the FY25–27E period. The brokerage company raises margins by 100 basis points for FY25E, but the improvement over FY26–27E is only marginal, limiting funding support.
Emkay Global maintained a “Reduce” rating on shares of Colgate Palmolive in light of the results, raising its price target for June 2025 to ₹2,850 per share from ₹2,525
Motilal Oswal
The negative balance between growth and profitability will persist, and profitability may have to decline in order to improve. Most of the nearby catalysts are captured through current pricing, which is 56x/52x P/E in FY25E/FY26E, according to Motilal Oswal.
Reaffirming its “neutral” recommendation on the stock, the brokerage raised its target price to ₹3,150 per share.
Share of Institutions Kotak
Kotak Institutional Equities raised the FY2025–2027 EPS forecast by around 3-5%, raised the sales forecast to 2–5%, and adjusted margin estimates Estimates for FY2025–2027 are around 9.5% sales CAGR and ~ of EBITDA margins show an increase of 105 bps.
The brokerage firm raised its target price to ₹2,875 per share from ₹2,525 earlier, taking the belief that Colgate’s stock is grossly overvalued and maintained its “Reduce.” ” in the proposal.
Can I purchase Colgate Share?
The sector P/E ratio is 61.92, while Colgate Palmolive India’s TTM P/E ratio is 55.49. On Colgate Palmolive India, thirty analysts have started covering the company. A buy rating has been assigned by four analysts, while a strong buy rating has been assigned by one. The stock has a sell rating from 13 analysts.
Why invest in Colgate?
Increase in Earnings
Even if Colgate-Palmolive’s historical EPS growth rate has been 2.1%, investors should really pay attention to the anticipated increase. This year, the company’s predicted EPS growth is 9.5%, exceeding the industry average of 6.4% for EPS growth.
(Disclaimer: The opinions and suggestions mentioned are from individual analysts, experts, and broking firms, not endorsed by Businessuncover. Investors should consult certified experts before deciding on investments.)
