Colgate Palmolive - Ahead of The Pack; Visit Note :: Edelweiss

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We met with Mr. Issam Bachaalani, Managing Director, Colgate Palmolive India. Key takeaways of the meeting include: (i) Colgate is eyeing share gains in all sub-segments of oral care; stated ~57% share in toothpaste in India has ample room to grow (Colgate has a 76% market share in Latin America); and (ii) new products funnel will remain strong in line with recent years. Though we remain sanguine about Colgate’s oral care segment, in our view, growth can be further enhanced if it sharpens focus on personal care segment (globally personal care contributes ~21% to its revenue versus ~2% in India).

Confident to surge ahead of market

Colgate doubled its village coverage in 2013 with rural distribution growth of ~20% over 3 years (as per Nielsen) and total reach of 4.6mn outlets. The company aspires to be No.1 player in the sensitive segment (currently leads in grocers, but aims leadership position in other retail channels).

High growth potential in oral care consumption

The company is working towards enhancing per capita consumption in toothpastes in India (currently at 147g/year, almost half of China’s), but it is a gradual process of change in habits, which will take time. The company continues to invest in the Bright Smiles Bright Futures drive, which involves distribution of dental packs and teaching oral hygiene in schools. In our view, it will continue to focus on oral care in the medium term and supplement it with differentiated and profitable personal care under the Palmolive range over long term.

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https://www.edelweiss.in/research/Colgate-Palmolive--Ahead-of-The-Pack;-Visit-Note/28532.html