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Key thrust remains intact

Colgate held an analyst meet 2026 to discuss its strategic growth initiatives, category opportunities and medium-term outlook

Colgate focuses on driving toothpaste and toothbrush category growth, accelerating premiumization, and scaling up its personal care portfolio. With ~99% toothpaste penetration, the company sees significant headroom for consumption growth, particularly given low brushing frequency and dentist penetration. Management highlighted a more balanced growth strategy, with volume, calibrated pricing and premiumization/mix expected to contribute to growth. Following the slowdown in urban consumption in early 2024, the company has sharpened its focus on scientific superiority, premiumization and innovation, while rural markets remain a key opportunity for consumption creation. Colgate delivered a strong 1QFY27 performance with 12% YoY revenue growth, marking the first quarter of double-digit revenue growth after six quarters. Importantly, growth is becoming more balanced across volume, pricing and mix rather than being predominantly price-led. Management is prioritizing growth over near-term margin, with brand investments increasing 34% YoY to INR2.5b (~16% of sales) in 1QFY27. Despite higher advertising intensity, the company expects gross margins to remain range-bound, aided by structural productivity under its ‘Funding the Growth’ (FTG) program, which generated 4.7% savings in FY26. We expect the company to deliver sales/EBITDA/adj. PAT CAGR of 9%/11%/11% over FY26- FY28E. We reiterate our BUY rating on the stock with a TP of INR2,500.

Consumption creation remains a key opportunity

Despite near-universal toothpaste penetration, oral-care consumption remains significantly below peer markets, providing a long runway for category growth. Per-capita toothpaste consumption in urban and rural India is only ~0.7x and ~0.5x that of the Philippines, respectively. Oral-care habits remain underdeveloped, with only 24% of urban consumers brushing twice daily, although this has improved from 20% earlier. In rural India, the proportion of consumers who do not brush daily has declined from 55% to 45%, indicating a gradual improvement in behavior. Colgate is focusing on education, affordability and higher replacement/consumption frequency to unlock this opportunity. The company is also seeking to build awareness around oral and systemic health while increasing dentist engagement given that only ~9% of consumers currently visit a dentist. However, changing consumer behavior remains a gradual process, and volume-led category acceleration is likely to remain progressive.

Premiumization remains a key growth lever

Colgate continues to see significant headroom for premiumization, with its premium portfolio growing ~6x faster than the market and premium toothpaste growing ~5x faster than its key competitor. The company is increasingly relying on scientific superiority and efficacy-led innovation to drive premiumization, rather than competing primarily on price. Colgate Strong Teeth with Arginine offers 8x better remineralization vs. the nearest competing product, while Colgate Total, Visible White Purple and PerioGard remain key premium growth brands. Visible White Purple has emerged as the company's most successful innovation over the past two years, while PerioGard is scaling up rapidly, with net sales approximately doubling annually, aided by its ISP endorsement and dentist-led prescriptions. Management sees the opportunity not merely to trade consumers up to higher-priced SKUs, but to simultaneously increase category consumption and improve product mix

Toothbrush and alternate channels provide additional growth vectors

Colgate remains the No.1 toothbrush brand across the INR10-299 price range, with growth increasingly driven by higher replacement rates in rural markets and strong demand for super-premium products in urban markets. This creates a dual growth opportunity through penetration/replacement at the bottom of the pyramid and premiumization at the top. On distribution, Colgate has ~1.7m directly serviced outlets and ~7.1m total reach, while modern trade and e-commerce together account for ~20% of category toothpaste sales. Quick commerce has emerged as a structural growth driver, contributing ~40% of Colgate's e-commerce sales and offering both premiumization and profitability benefits, with margins ~400bp higher than the traditional channel. Meanwhile, Palmolive remains a turnaround opportunity, with the company partnering with Bombay Shaving Company to strengthen its digital presence and D2C/e-commerce execution.

Valuation and View

Heading into FY27, management reiterated its focus on driving balanced growth through volume recovery and selective pricing actions while continuing to invest in brands and premiumization initiatives to support revenue growth. We model 9% revenue CAGR and 11% EBITDA CAGR over FY26-28E. We reiterate our BUY rating on the stock with a TP of INR2,500 (based on 40x Mar’27E EPS).

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