Result Update: Colgate Palmolive (India) Ltd. - SELL - TP Rs.980 - Kotak

Colgate reported in-line revenues and gross margins for the quarter; however, advertising expenses came in significantly ahead of expectations (+24% y/y). The results indicate that the company is making a big push, amid less favourable circumstance, to drive volumes and market share. Colgate's pricing actions indicate that the company is likely willing to sacrifice margins to tide over the market share loss to "naturals". We cut our FY18E EPS 10%, and raise our price target (marginally) to Rs 980 as we roll forward to FY19E. Given the run-up in the stock since our last update, as well as weaker outlook for medium-term earnings growth, we downgrade the stock to SELL (ACCUMULATE earlier).

Shares of COLGATE-PALMOLIVE (INDIA) LTD. was last trading in BSE at Rs.975.15 as compared to the previous close of Rs. 975.95. The total number of shares traded during the day was 20711 in over 924 trades.

The stock hit an intraday high of Rs. 981 and intraday low of 973. The net turnover during the day was Rs. 20210994.

Source : Equity Bulls

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