Colgate-Palmolive Volumes witness moderation… Maintain Hold ::Emkay

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Colgate-Palmolive

Volumes witness moderation… Maintain Hold

HOLD

CMP: Rs 896                                       Target Price: Rs 826

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n     Lower volume growth in toothbrush restricts revenue growth at 12.6% to Rs 5.8 bn, marginally below our expectation. APAT at Rs  1.1 bn is above our forecasts

n     Moderation in volume growth- Toothpaste market shares improved YoY, however declined sequentially - new launches likely to aid further market share improvement

n     New launches, skewed towards premium/niche category, will result in higher A&P spends, which along with higher tax rates, will restrict PAT CAGR to 13% over FY11-13E

n     Retain FY13E earnings of Rs37.6/Share- Valuations at 24X FY13E EPS appear fair - Maintain HOLD rating with target price of Rs826/Share