Comments
Reliance Securities
Colgate-Palmolive (Buy)
CMP: ₹1,035.1
Target: ₹1,323
Colgate-Palmolive
is the market leader in oral care market with volume share of 54 per cent and derives around 40 per cent revenues from the rural areas.
Colgate reported strong set of numbers in 3QFY18 with revenue and net profit growth of 19 per cent and 34 per cent respectively.
We expect the company to post revenues of ₹4,830 crore/₹5,500 crore and net profit of ₹770 crore/₹910 crore in FY19E/20E respectively.
Although revenue growth in recent quarters was aided by lower base, we expect the company to sustain its growth momentum, going ahead on the back of trade stabilisation post GST, strong growth in rural markets due to two consecutive years of good monsoons, benign input cost scenario and aggressive thrust on ayurvedic portfolio.
Based on expected EPS of ₹33.4, the stock currently trades at attractive valuations of 31.3x FY20E earnings.
We recommend ‘buy’ on the stock with a target price of ₹1,323.
Comments
COMMENT NOW
Comments
Comments have to be in English, and in full sentences. They cannot be abusive or personal. Please abide by our community guidelines for posting your comments.
We have migrated to a new commenting platform. If you are already a registered user of TheHindu Businessline and logged in, you may continue to engage with our articles. If you do not have an account please register and login to post comments. Users can access their older comments by logging into their accounts on Vuukle.