Goldman Sachs has maintained a ‘Sell’ rating on Colgate-Palmolive (India) Ltd, with a target price of ₹2,630, following the company’s Q4 FY25 earnings that reflected pressure on revenue and profitability amid a competitive oral care landscape.
According to the brokerage, Q4 domestic revenue declined 1.8% year-on-year, which came in 3% below its estimates (GSe). While EBITDA fell 6% YoY, it was still 5% ahead of Goldman’s expectations.
EBITDA margins contracted by 170 basis points (bps) year-on-year, primarily due to:
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a 60 bps increase in employee costs,
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a 100 bps rise in advertising spends, and
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a 130 bps uptick in other expenses,
all measured as a percentage of sales. This was partially offset by a 130 bps expansion in gross margins.
Goldman Sachs noted that the current competitive environment in the oral care segment could continue to strain Colgate’s margin expansion strategy, especially as rivals intensify spending on promotions and distribution.
Colgate shares closed at ₹2,660.00 on May 21, nearly in line with the brokerage’s revised target price.
Disclaimer: This article is for informational purposes only and does not constitute investment advice. Please consult a financial advisor before making any investment decisions.