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Colgate-Palmolive (India) Ltd's fourth-quarter profit fell less than expected, helped by price hikes implemented to combat surging costs.

The Indian arm of the U.S. consumer goods major reported a 2.3% fall in net profit to 3.16 billion rupees ($38.64 million) for the quarter ended March 31.

Analysts, on average, had expected a profit of 2.71 billion rupees, according to Refinitiv IBES.

The net profit includes a one-time tax reversal, barring which it had risen nearly 9%.

The toothpaste maker's sales rose nearly 4% to 13.42 billion rupees, with analysts attributing it to price hikes. Total expenses were up nearly 3%.

The company raised prices to combat increasing costs, a move also made by peers such as Dabur India Ltd, Hindustan Unilever Ltd, and Nestle India Ltd.

Toothpaste posted high-single-digit percentage sales growth, helped by the launch of higher-priced products even as the broader category struggled in rural areas, according to Colgate-Palmolive India CEO Prabha Narasimhan.

Colgate-Palmolive India's better-than-feared earnings come after it had reported a drop in profit in two of the prior three quarters.

Its parent company raised its full-year organic sales forecast last month, betting on consistent price hikes and steady demand for its pet nutrition products under the Hill's Pet Nutrition brand.

Consumer goods makers in India are likely set up for further sales gains in the April-June quarter as well, with a Reuters poll of economists finding India's consumer inflation likely cooled to an 18-month low in April due to a moderation in prices.

However, they have reported mixed earnings for the March quarter so far: toothpaste-maker Dabur posted shrinking margins, while Pepsi-bottler Varun Beverages recorded profit growth.

Shares of Colgate-Palmolive India fell nearly 2% in the January-March quarter against an almost 4% rise in the Nifty FMCG Index.

($1 = 81.7800 Indian rupees)