Colgate-Palmolive Rich valuations… maintain Reduce ::Emkay,

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Colgate-Palmolive

Rich valuations… maintain Reduce

REDUCE

CMP: Rs1,003                                       Target Price: Rs826

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n     Sales growth at 19% to Rs 6.6bn, higher than our expectations, is driven by 13% volume growth. APAT (ex-VRS of Rs82mn) at Rs 1.0 bn is marginally below our estimates

n     Volume market shares in key categories of toothpastes and toothbrush witness a decline – 70 bps to 53% and 420 bps and 36.3%, respectively

n     While higher realizations offset input cost pressure, higher A&P spends resulted in 196bps decline in operating margins to 18.4%.

n     Reduce FY12E/FY13E EPS by 4% and 9% to Rs 31.4 and Rs 34.3, respectively. Maintain our Reduce rating on the stock with a target price of Rs 826/share