A shopper examines a box of Colgate toothpaste at a store in Mumbai. (Photographer: Sebastian D’souza/Bloomberg News)

Colgate-Palmolive’s Sales Volumes Drop On ‘Soft’ Consumer Demand

Colgate-Palmolive India’s shares slipped after sales volumes declined 3 percent in the January-March quarter on account of softness in the wholesale channel. This was despite signs of recovery from the impact of demonetisation in the previous quarter, the management said in its earnings statement on Monday.

The fast moving consumer goods (FMCG) company’s net profit remained almost flat at Rs 142.6 crore compared to Rs 143.3 crore in the same quarter last year, it said in a stock exchange filing. The number missed the Bloomberg consensus estimate of Rs 157 crore. Revenue increased 2.4 percent to Rs 1,178 crore on a year-on-year.

Earnings before interest, tax, depreciation and amortisation increased 1.2 percent to Rs 244.31 crore compared to the same quarter last year. EBITDA margins contracted 20 basis points to 20.8 percent in the same period.

The company maintained market leadership in the toothpaste and toothbrush categories in the financial year 2016-17 with a 55.1 percent and 47.4 percent market share respectively.

The transition towards the Goods and Services tax regime is likely to result in challenges for the company, the company said in its exchange filing.

We expect challenges while transitioning into the GST environment, including an impact on trade pipeline inventory. Colgate is taking all necessary steps to minimise business disruptions during the transition.  
Issam Bachaalani, Managing Director, Colgate-Palmolive India

Shares of the company fell as much as 3.56 percent – the most in six months – to Rs 978 on the National Stock Exchange.