- 27 May 2022
- ICICIdirect Research
COLGATE POSTS Q4FY22 NUMBERS
News: Colgate Q4FY22 results were in line with our estimates on revenue & better than our estimate on operating profit & earnings front. Net sales grew by 1.4% to Rs.1301.3 crore (Idirect estimate : Rs.1351.7 crore). Gross margins have contracted by 145 bps. Operating profit grew by 1.8% to Rs.429.4 crore (I-direct estimate : Rs.408.9 crore) & operating margins expanded by 13 bps. Net profit grew by 2.8% to Rs.323.6 crore (Idirect estimate : Rs.272.3 crore)
Views: Colgate gross margin contraction has been lower compared to other FMCG companies. We believe its high gross margins (66%) warrant lesser price hikes to pass on commodity inflation compared to some of the other FMCG companies. On a full year basis, the net sales grew by 5%. We believe oral care category is largely penetrated & scope to increase the toothpaste consumption (brushing a twice a day) is limited. The company is concentrating only on oral care business, which has led to single digit growth for the company over the period of last five years. We believe the company has to expand its personal care portfolio to drive the growth in the longer run
Impact: Neutral