For 4QFY2012, Colgate posted healthy 14.8% yoy growth in its bottom line, which was in-line with our estimates. The company’s operational performance continued to remain healthy with volume growth coming in at ~11% for the quarter. Colgate also enjoyed ~6.5% price/mix growth due to the price hikes taken by the company and growth in the sales volume of premium products such as Colgate Total and Sensitive. We remain Neutral on the stock.”
“During 4QFY2012, Colgate posted 17.9% yoy growth in its net sales to Rs686cr, in-line with our estimates. The company has further consolidated its leadership position in the toothpaste category, with its volume market share going up to 54% in April 2012 from 52.2% in April 2011. The company’s volume market share also rose to 26.2% in the mouthwash category from 25.7% in April 2011. OPM rose by 81bp yoy to 22.3%. Other expenses as a percentage of sales rose by 35bp yoy, while selling and administrative expenses as a percentage of sales fell by 26bp yoy. The company’s net profit for the quarter rose by 14.8% yoy to Rs131cr.”
“During FY2012-14E, we expect Colgate to report a 14.1% CAGR in its top line. We have modeled in a 275bp yoy margin expansion due to improvement in price/mix. We expect Colgate to register a ~15.4% CAGR in its earnings over FY2012-14E. At the CMP, the stock is trading at 26.1x FY2014E EPS. We see limited upside in the stock price from current levels; hence, we maintain our Neutral rating on the stock
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