Colgate Share Price Fall 5% as Q2 Margin Miss, Disappoints Market 

Shares of Colgate Palmolive India sank nearly 5% on 25 October after the company’s second quarter results 
revealed lower-than expected profit margins. Though Colgate's net profit for the quarter rose by 16.2% year on 
year to ₹395.05 crore, driven by steady growth across its product portfolio, the market was disappointed by its 
EBITDA growth which increased by only 3% due to a 205 basis points decline in profit margins.

This was attributed to increased promotional spending and a challenging demand environment according to Colgate’s 
management. 
 
For the quarter ending September, Colgate reported a 10% increase in sales with revenue rising to ₹1,609.21 
crore compared to ₹1,462.38 crore in the same quarter last year. Colgate saw a positive response in its key 
product segments including high single digit growth in toothpaste sales and double digit revenue growth in 
toothbrushes.

HDFC Securities praised Colgate’s performance as the best among consumer companies 
reporting this season. However, it advised caution noting that the growth was partly due to a favorable base 
effect and high visibility ad campaigns. 

Brokerages Trim Targets Amid Margin Concerns

The drop in Colgate’s profit margins led some brokerages to lower their expectations. HDFC Securities set a 
target price of ₹3,275 with a reduce rating, highlighting that although Colgate's growth was impressive, it relied 
on heavy advertising to drive demand impacting profitability. 
 
Kotak Institutional Equities also revised its estimates for Colgate trimming revenue forecasts by 1% and 
reducing gross and EBITDA margins by 105-145 basis points and 120-160 basis points, respectively. It adjusted 
Colgate’s EPS estimates downward by 3-5% for FY2025-27 and set a target price of ₹2,825 per share maintaining 
a reduce rating. 

About Colgate

Colgate Palmolive India is a leading consumer products company specializing in oral care, personal care, home 
care and hygiene products. Known primarily for its flagship toothpaste and toothbrush brands, the company 
has built a strong market presence in India and globally. Colgate's oral care line which includes popular products 
like Colgate Strong Teeth, Colgate MaxFresh and Colgate Total has made it a household name.