Colgate-Palmolive (India) Q4FY16 standalone net profit declines 11% yoy to Rs.145.89 crore : Estimates Mixed

The company’s standalone revenue stood at Rs. 1,098.82 crore, up 6.84% yoy and 8.27% qoq.

May 24, 2016 2:30 IST | India Infoline News Service
Colgate-Palmolive (India), American multinational consumer products company, reported standalone net profit of Rs.145.89 crore for the quarter ended March 31, 2016, registering decline of 10.84% yoy and 8.48% qoq. The company’s revenue stood at Rs. 1,098.82 crore, up 6.84% yoy and 8.27% qoq.

Its standalone core operating profit of Rs. 241.20 crore for the quarter, declined by 2.53% yoy but clocked growth of 3.82% qoq. Operating profit margin for the current quarter at 21.95% contracted by 211 bps yoy and 94 bps qoq.

For the year ended March 31, 2016, the company reported standalone net profit of Rs. 576.51 crore, growing by 3.14% yoy. Its standalone revenue for the period stood at Rs. 4,162.29 crore, registering growth of 4.53% yoy.

Colgate-Palmolive (India) Ltd's core operating profit stood at Rs. 931.29 crore, recording growth of 13.26% yoy. Operating margin for the current period at 22.29% expanded by 164 bps yoy.

Colgate-Palmolive India Ltd (Q4 FY16): Volume growth recovers; high Ad spent eats into margin!

Colgate Palmolive (India) reported a 6.8% revenue growth to Rs. 1,099 crore. Domestic volumes grew 4% (highest in 4 quarters) and higher exports led to an overall volume growth of 6%. Toothpaste volumes grew 3%, whereas toothbrush volumes grew 5% during the quarter. Excluding the excise impact, organic sales grew 13% indicating a healthy realization growth of 7%.

However, EBITDA margin declined by 211bps to 22% and PAT by 10.9% due to steep increase in Ad spend by 303bps led by increase in competitive intensity especially from Dabur and Patanjali. Management indicates a gradual recovery in FY17 (to be aided by soft volume growth in base).

Result Highlights: (Rs. in crore)

Reported Results IIFL Estimates Variance (%)
Standalone Revenue 1098.82 1110.13 [1.02]
Standalone Net Profit 145.89 181.36 [19.56]

Standalone EPS for the quarter stood at Rs. 5.36.

Bloomberg estimated the company’s standalone net profit at Rs. 299.93 crore.

Management Comments: Mr. Issam Bachaalani commenting on the results said that “Despite challenging macro environment and low consumer demand, Colgate reported good growth across the businesses and maintained its leadership in the toothpaste and toothbrush category at 55.7% and 46.2% respectively”.

Mr. Bachaalani also stated that We strongly believe in developing innovative products which is a key driver of the company is long term sustainable growth. Long term growth potential for oral care products remains positive and in anticipated to drive progression in next five years. This can largely be attributed to external factors like increasing disposable earnings, increasing lower and upper middle class strata, opportunity to convert under penetrated toothpaste market and rising oral health awareness and solutions in the segments.

Stock Commentary:

Colgate-Palmolive (India) Ltd is currently trading at Rs. 789.95, down by 21.45 points or 2.64% from its previous closing of Rs. 811.4 on the BSE.

The scrip opened at Rs. 817 and has touched a high and low of Rs. 822.15 and Rs. 787.6 respectively. So far 185669(NSE+BSE) shares were traded on the counter. The current market cap of the company is Rs. 22068.91 crore.

The BSE group 'A' stock of face value Rs. 1 has touched a 52 week high of Rs. 1049.75 on 30-Jul-2015 and a 52 week low of Rs. 791 on 11-Mar-2016. Last one week high and low of the scrip stood at Rs. 832.5 and Rs. 799.25 respectively.

The promoters holding in the company stood at 51 % while Institutions and Non-Institutions held 24.33 % and 24.67 % respectively.

The stock is currently trading above its 200 DMA.

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