Following a 17.2% loss in Q2 net profit and a 6.3% decline in sales on a year-over-year basis, Colgate Palmolive (India) shares fell over 4% before ending 2% down on Friday.
Brokers separated
Brokers issued diverse calls and were generally apprehensive about the stock. Motilal Oswal thinks Colgate is well-positioned for a rebound in the next quarters, given the increasing demand patterns that have followed the adoption of GST 2.0, notwithstanding the company’s poor performance over the last three to four quarters. At ₹2,850, the brokerage has maintained its buy on the stock.
Colgate provides value comfort, according to Nuvama Institutional Equities, but it must manage margin headwinds brought on by a Q3 inverted duty structure and fierce competition. The firm has decided to keep the buy at a lower target price of ₹2,870 instead of ₹3,135
JM Financial has maintained its add rating at the target price of ₹2,405 as well.
PL Capital has maintained its hold call and set a target price of 2,534 for the shares, up from 2,453 previously. According to the brokerage, the company’s long-term drivers—which include premiumization via science-backed innovations and developing core toothpaste brands—remain strong, but increased competition is still a major worry.
InCred Equities has retained its hold rating, setting a revised target price of ₹2,435 (down from ₹2,570), citing slower-than-expected sales growth as a downside risk and a quicker-than-anticipated recovery in the core portfolio as an upside potential.
Global brokerages Jefferies, Citi, CLSA, and Nomura have all expressed differing opinions about Colgate-Palmolive. With a target of ₹2,100, Citi has assigned a sell rating. Nomura suggested lowering the target price to ₹2,200, noting an 8.5% decline in volumes and steady margins, but limiting profitability due to negative operational leverage, while CLSA held with its hold at ₹2,130. Jefferies, meanwhile, issued a buy call at ₹2,700, citing strong premium-segment performance and anticipating that the stock would be rangebound.
In contrast to the previous close of ₹2,288.80, the stock touched an intraday low of ₹2,200.60 before closing at ₹2,237.85 on the BSE.