NOMURA - Colgate

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Results came in marginally below our estimates. While sales were 3% below

our estimate, PAT was 2% below ours and 6% below consensus estimates.



What do the results mean?

Volume growth of the toothpaste business at 7% shows marginal

improvement on a sequential basis, but is still well below the long-term

average for the company. EBITDA margin improved by 250bp y-y, but this

was on account of the extremely low base last year.

Key numbers

 Net sales rose 11% y-y to INR9.94bn against our expectation of

INR10.21bn and consensus at INR10.17bn.

 EBITDA came in at INR1.87bn vs. our estimate of INR1.93bn. Consensus

was also expecting a similar number.

 Consolidated gross margin expanded by 290bp y-y vs. our estimate of a

120bp y-y improvement.

 EBITDA margin came in at 18.8%, up 250bp y-y. We were expecting

EBITDA margin at 18.9% (up 260bp y-y) and the Street was at 19.1%.

 PAT came in at INR1.3bn against our expectation of INR1.32bn and

consensus at INR1.37bn.