Colgate-Palmolive's Q2 profit misses estimates - Check revised price targets by brokerages here

On the back of mute second-quarter earnings for the financial year 2021-22, the brokerage firms are divided on Colgate-Palmolive India. The company on Monday reported nearly 2 per cent lower profit to Rs 269.17 crore, while revenue grew by 5.19 per cent to Rs 1344 crore in Q2FY22 year-on-year basis.

In this regard, Credit Suisse maintained an Outperform call on Colgate, pointed out that the muted growth with some margin headwinds, while it cuts FY22-24 earnings by 5 per cent to build in lower gross margin and mentions that the price growth at 1 per cent was below expectations.

The brokerage firm reduces its price target to Rs 1750 per share from Rs 1890 per share earlier.

Similarly, CLSA also maintains an Outperform stance and says Colgate’s Q2 was weak as sales grew 5 per cent, while EBITDA and PAT were down 2 per cent each. It mentions that the volume growth stood at 4.5 per cent, but price growth of 3 per cent largely been absorbed. 

Like Credit Suisse, CLSA too revises the price target to Rs 1735 per share from Rs 1940 per share earlier. 

Meanwhile, Goldman Sachs maintained a Neutral stance on Colgate with a target of Rs 1635 per share. It points out that below expectations on weaker gross margin/high operating costs and higher-than-expected volume growth due to natural push. 

The brokerage firm adjusts FY22-24 EPS estimates by 2 to 5 per cent lower, as downside risk is increasing in competition from the naturals segment.

On the other hand, Citi says the Q2 revenue of Colgate is in line, however, profit misses estimates, and it finds it hard to be constructive with modest category growth. It pares estimate by 1-5 per cent factoring recent results and cost-push and maintains Sell stance with a price target of Rs 1490 apiece.

The shares of Colgate have been trading around 1 per cent higher amid lower-than-expected Q2 results to Rs 1548.55 per share on the BSE as compared to a 0.43 per cent rise in the S&P BSE Sensex.