Shares of declined nearly 4 per cent on Friday following a profit and a 6.3 per cent drop in revenue on a y-o-y basis.
Brokerages divided
Brokerages were largely cautious on the stock, issuing divergent calls. Despite the company’s performance being weak over the past 3-4 quarters, Motilal Oswal believes that Colgate is well-positioned for a recovery in the coming quarters, with improving demand trends following the GST 2.0 implementation. The brokerage has maintained buy on the stock at ₹2,850.
Nuvama Institutional Equities noted that Colgate offers valuation comfort, but needs to navigate margin pressures stemming from an inverted duty structure in Q3 and competitive intensity. The brokerage has retained buy at a reduced target price from ₹3,135 to ₹2,870
JM Financial has maintained add rating at ₹2,405 target price.
Retaining hold call, PL Capital has assigned a target price of 2,534 on the stock from 2,453 earlier. The brokerage said that the company’s long term drivers are intact, led by driving core toothpaste brands and premiumisation through science-backed innovations (driving growth in urban premium segments), while heightened competitive pressure remains a key concern.
InCred Equities has maintained hold rating at a lowered target price of ₹2,435 from ₹2,570 earlier, citing slower-than-expected sales growth as the downside risk and faster-than-expected recovery in core portfolio as the upside risk.
Global brokerages Citi, CLSA, Nomura and Jefferies have taken varied stances on Colgate-Palmolive. Citi has issued a sell rating with a target of ₹2,100. CLSA maintained a hold at ₹2,130, while Nomura recommended reduce at ₹2,200 target price, citing an 8.5% drop in volumes and stable margins, but negative operating leverage limited profitability. Meanwhile, Jefferies assigned a buy call at ₹2,700, pointing to resilient premium-segment performance and expecting the stock to remain rangebound.
The stock traded at ₹2,213.30 on the at 12.32 pm, hitting an intraday low of ₹2,200.60 against the previous close of ₹2,288.80.