Colgate-Palmolive share price rose nearly 2% on Friday, a day after the company appointed former Hindustan Unilever (HUL) executive Prabha Narasimhan as MD and CEO. This will be Colgate India’s first outside MD in the past 12 years. Brokerage firm Edelweiss Securities said, “Narasimhan could be a great hire for Colgate India to further scale-up aggression in oral care (especially claw back market share from Dabur and Patanjali), have a larger play in naturals and scale up Palmolive brand.” Colgate Palmolive shares touched intraday high of Rs 1,525 apiece on the BSE.
Stock talk: Should you buy, hold or sell?
Edelweiss: HOLD
Edelweiss Securities said that Narasimhan’s appointment shows renewed aggression by Colgate to try new initiatives. “We are seeing a marked scale-up in new launches (premium toothpastes, smart brushes) by Colgate in the past few quarters. Colgate is going through a paradigm shift to premiumize, moving from oral care to oral beauty,” the said. As Narasimhan has handled home care, personal care, Lipton etc. at HUL/Unilever, she could be a great hire for Colgate India to further scale-up aggression in oral care, it added. The brokerage has a ‘Hold’ rating on the stock
JP Morgan: BUY
Target price: Rs 1,580
JP Morgan has kept a neutral rating on Colgate-Palmolive stock with a target price of Rs 1,580 per share. “An external hire for CEO position is a bit of an unanticipated move. The key priorities for new CEO include accelerating revenue growth for oral care business. Strengthening non-oral care portfolio positioning will be one of the focus areas,” it said.
Nomura: BUY
Target price: Rs 1,700
Nomura has maintained a buy rating on the stock with a target price at Rs 1,700. “Narasimhan is a new CEO, a first top management worker from outside. The change in guard indicates renewed efforts to regain share,” it said. The brokerage firm said that this new appointment would drive up expectations. However, it remains cautious on the company’s medium-term growth prospects.
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