Colgate-Palmolive (India) Ltd (Q3 FY08)
CMP Rs421, BUY
Target price Rs515, Upside 22.5%
ä Q3 revenues almost in line with our expectations at Rs3.7bn, driven by strong ~8% volume growth in the toothpaste category.
ä Operating margins remained under pressure due to sharp rise in adspend. Higher spend on brand reinforcement not a cause of concern.
ä
With increasing fiscal benefits from Baddi plant and strong volume growth across segments, we expect Colgate to register revenue and profit CAGR of 12% and 13% respectively over the next two years.
ä Maintain Buy with a target price of Rs515, an upside of 22.5%.
Sunday, February 10, 2008
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