BQ Blue’s special research section collates quality and in-depth equity and economy research reports from across India’s top brokerages, asset managers and research agencies. These reports offer BloombergQuint’s subscribers an opportunity to expand their understanding of companies, sectors and the economy.
ICICI Securities Report
We recognise that turning structurally positive on Colgate Palmolive India Ltd. requires multiple factors to improve. With a not-so-favourable narrative of high category penetration, marginal presence in naturals and no visible improvement in consumer habit of twice brushing, the stock performance has mostly been modest (underperformance versus Nifty in all time frames – one, two, three, five, 10 year).
That said, we reckon Colgate fundamentals (and narrative) may potentially improve over 12-24 months.
Firstly, any likely deceleration in growth of naturals segment within toothpaste removes an important growth headwind for Colgate. Two, the simple template of new Chief Executive Officer driving stock performance is yet to play out. Three, the work on new categories may finally be unveiled (Ram Raghavan indicated there is six-nine months’ delay due to Covid-19). Lastly, Colgate is finally thinking like a category leader and looking to expand the market.
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