Colgate Palmolive India's first quarter net profit rose 17% year-on-year to Rs 117 crore, helped by strong growth across its toothpastes and toothbrush categories. The company said it gained market share in both the segments.
Its net sales in April-June were up 20% to Rs 736 crore, helped by a 11% volume growth.
"In an inflationary environment, the company continuing efforts and focussed programmes to enhance efficiencies and reduce costs continue to yield strong, positive results helping to maintain margin and fund investments in building and strengthening brand equity and the business. Prudent price increases and cost management has enabled the comany to maintain its strong gross margin for this quarter," it said on Monday.
Colgate strengthened its leadership position in toothpastes with a volume market share of 54.5% in Jan-June period, up from 52.4% in the same period a year ago. Its market share in toothbrushes also grew to 38.2% from 36.3%.
The company has recently acquired land on long-term lease to set up a toothbrush manufacturing facility in Andhra Pradesh.
"Colgate's high gross margins (61% in FY12) give it sufficient firepower in case there is a disruptive competitor in the oral care category," said Nitin Mathur of Espirito Santo Securities.
Colgate's total shareholder returns have outperformed the broader FMCG market in the last five years, despite the overhang of Procter & Gamble's entry in the toothpaste market, he said, maintaining a "buy" on the stock.
Colgate Palmolive shares were up 0.2% at Rs 1,167 on NSE in afternoon trade.
Source: www.moneycontrol.com
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