Colgate-Palmolive’s natural segment sees growth:IIFL

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Updated: May 26, 2016 8:09:07 AM

Colgate reported a 6.8% revenue growth to `1,099 crore. Domestic volumes grew 4% (highest in 4 quarters) and higher exports led to an overall volume growth of 6%. Toothpaste volumes grew 3%, whereas toothbrush volumes grew 5% during the quarter.

COLGATE PALMOLIVE, GROWTH, INDUSTRY NEWS, COMPANY NEWSColgate reported a 6.8% revenue growth to `1,099 crore. Domestic volumes grew 4% (highest in 4 quarters) and higher exports led to an overall volume growth of 6%. Toothpaste volumes grew 3%, whereas toothbrush volumes grew 5% during the quarter.

Colgate reported a 6.8% revenue growth to `1,099 crore. Domestic volumes grew 4% (highest in 4 quarters) and higher exports led to an overall volume growth of 6%. Toothpaste volumes grew 3%, whereas toothbrush volumes grew 5% during the quarter.

Excluding the excise impact, organic sales grew 13% indicating a healthy realization growth of 7%. Key positives include – Recovery in volume growth to 4% (highest in 4 quarters); Step–up in herbal segment innovation (launched first sensitive toothpaste with clove) to counter the rise in likes of Dabur and Patanjali; Rise in brand investment to aid volume recovery; and success in personal care (3% of India sales; 21% of global sales) can boost long–term growth.

Key negatives include — toothpaste market share declined 230bps to 55.7% (up 60bps m-o-m in April 2016) from 57.2% in 2015; inventory days up to 72 days from 59 in FY15; 450bps jump in annual tax rate (ex `31 crore prior period reversal); FY17 effective tax rate to be 32%. Management commented that the natural segment is growing in double digits, multi–benefit and low price segments have grown slowly and family has grown in–line with markets.

The offerings in the natural space including Active Salt variants have grown well and it plans to increase offerings in this space. It has recently launched Colgate Sensitive Clove Essence. Capex of `3.5–4 billion in F17E on increasing capacities of toothpastes and toothbrushes.

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