Colgate Palmolive: Targeted at Rs 2214 by Prabhudas Lilladher

Colgate Palmolive Sees 9.1% YoY Revenue Growth in 4Q26

Colgate Palmolive's (CLGT) latest research report by Prabhudas Lilladher reveals a strong 9.1% year-over-year (YoY) revenue growth in the fourth quarter of 2026, reaching ₹15.9 billion. This growth can be attributed to a 4-5% increase in volumes, driven by an uptick in urban demand and a grammage increase in Low Unit Price (LUP) products.

The report highlights that rural markets continue to outperform urban markets, although the gap between the two has narrowed significantly. Premium segments have been performing exceptionally well, with a 35% growth over the last two years. However, CLGT is facing input cost pressures in key inputs, prompting the company to implement a price increase, its first since the Goods and Services Tax (GST) reduction.

Volume Growth and Market Share

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CLGT is aiming for mid-single-digit volume growth, driven by three key factors: the strengthening of its core toothpaste franchise, premiumization through science-backed innovations within oral care, and sustained market share despite increasing competition from smaller direct-to-consumer (D2C) brands.

Outlook and Valuation

The research report estimates an 8.3% earnings per share (EPS) compound annual growth rate (CAGR) over the fiscal years 2026-2028. Based on this estimate, the company's valuation is set at 38 times March 2028 EPS, with a target price of ₹2,214 (previously ₹2,174).

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Recommendation

Given the current market conditions, the report recommends retaining a HOLD rating on CLGT, as the stock lacks triggers for a buy call, but the downside appears limited.