Colgate-Palmolive (India) Ltd - Category growth resilient; Retain Accumulate - Emkay

Reco: ACCUMULATE
CMP: Rs 1310
Target Price: Rs 1400

- Yet another stellar topline performance; displays category resilience - Revenue above estimates at Rs 8.8bn, +16% yoy with volume growth of 10% yoy

- A&P spends continue to suppress earnings growth; EBIDTA grows 11% yoy to Rs 1.4bn, but PAT growth just 2% yoy to Rs 1.1bn led by higher tax outgo & lower other income

- Competitive intensity in Oral Care remains high; thus upped A&P spends to 21% of sales in FY14E, but would normalize thereafter to 19% of sales in FY15E

- Earnings hangover to remain short lived; Retain Accumulate with price target of Rs1400/Share.

Source : Equity Bulls

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