Published on 26/10/2020 12:06:30 PM | Source: Sushil Finance

Hold Colgate Palmolive (India) Ltd For Target Rs.1,640 - Sushil Finance

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Colgate Palmolive (India) Ltd. has reported numbers for the quarter ended Sept 20. Following are the highlights of the result. 

Highlights From The Quarter (Q2FY21)

* The company reported Net Sales of Rs. 1,277.6 Cr in Q2FY21, an increase of 5.3% over Q2FY20. Domestic net sales for the quarter reported 7.1% growth. Reported Net profit after tax for the quarter was Rs. 274.2 Cr as against the Net Profit of Rs. 244.1 Cr on a YoY basis. Excluding the one time impact of tax rate change in the previous year, the Net profit growth is 32%.

* Net Sales for Q2FY21 was recorded at Rs. 2,311.3 Cr, an increase of 1% on a YoY basis. Net profit for the same period was Rs. 472.4 Cr, an increase of 14% over the previous period.

* Effective management of all revenue and cost drivers, despite all the uncertainties and challenges around the company drove improvements in key financial metrics with gross margins and EBITDA at 67.9% and 32% respectively.

* All categories saw positive growth this quarter with Toothpaste continuing its accelerated performance, driven by strong brand fundamentals and household penetration.

* New Products launched/Relaunched

* Colgate Visible White Instant, with its unique optical brighteners technology that starts whitening from the first brushing itself.

* Colgate Gentle line of toothbrushes has been launched across price points, it offers solutions to different consumer preferences.

* Colgate Zig Zag was also relaunched.

* Colgate Vedshakti Mouth spray which is a pocket sized solution that offers instant germ kill with a refreshing minty saunf flavor was also launched.

* The Board declared a First Interim Dividend for FY21 of Rs.18 per share of Rs. 1 each (FV). The dividend payout to the shareholders will be Rs. 489.6 Cr and will be paid on and from November 17, 2020. Ex Date: November 2, 2020. 


Outlook and Valuation

We expect the company revenue to grow at 4 years CAGR (FY19-FY22E) of ~4% to Rs. 5,197.2 Cr and FY22E EPS to be ~Rs.36.40. Considering a price multiple of ~45X we arrive at a price target of Rs. 1,640 which shows an upside of ~12% within an investment horizon of 16 to 20 Months.


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