NEUTRAL Halfway there… INDUSTRY FMCG CMP Rs 1,180 Target ... - 4QFY19... · flagship product...

RESULTS REVIEW 4QFY19 28 MAY 2019

Colgate-Palmolive (India) NEUTRAL

HDFC securities Institutional Research is also available on Bloomberg HSLB <GO>& Thomson Reuters

Halfway there… Colgate’s 4Q performance was slightly below our estimates (volumes and margins). Key positive is that market share has now begun to stabilize over 2HFY19. However, oral care category growth continues to trail FMCG sector. As a result, we don’t expect the co. to deliver high-single digit to low double digit volume growth unless it begins to gain significant market share (low probability). We maintain NEUTRAL and value the co. at 35x on Mar-21 EPS, arriving at a TP of Rs 1,227. HIGHLIGHTS OF THE QUARTER Revenues grew by 6% (vs. exp. of 8%) driven by 5%

volume growth. Volume growth was sluggish despite (a) Pan-India launch of Swarna, (b) Re-launch of flagship product (Dental cream), (c) Higher promotions and (d) Curbing market share loss.

Naturals growth has now tapered to mid-teens from 25-30% range as the segment has gained meaningful share (>25%). Within naturals, Colgate has gained market share (8.1% in CY18 vs. 6.5-7% in CY17) driven by new launches and re-launch of Colgate Salt.

Premium segment (4% mix vs. 8% mix earlier) has returned back to growth vs. degrowth earlier (impacted by naturals). Co. has re-launched Colgate Total to capitalize on this trend.

GM declined by 110bps (exp. -65bps) as the co. stopped benefiting from low cost inventory (owing to benign crude). A&P/Other expenses grew by 9/8% which resulted in 1% growth in EBITDA (vs. exp of 8%). Management stays committed to prioritize volume growth over margin expansion (unlike FY18-FY19). We model 150bps EBITDAM expansion over FY19-21E.

APAT grew by 2% to Rs 2.0bn (exp Rs 2.04bn) owing to higher other income and lower depreciation.

STANCE Colgate has attained the first step towards recovery i.e. stabilizing market share. Hereon, the co. needs to consolidate its position and return to market share gains. As a category leader, Colgate needs to drive category growth at a time when natural’s fad is moderating. We believe the co. is taking the right steps (although at a modest pace) i.e. (a) Improving brand visibility (new TVC campaigns, in-store activations etc), (b) Re-launches of flagship products, (c) Regional based strategies (tastes and incomes), (d) Focus on low unit packs (drive sampling) and (e) Higher promotions (via multi-unit packs). We model partial recovery in volume growth and market share in FY20-21E. With limited upside, we remain NEUTRAL on the company.

Financial Summary YE March (Rs mn) 4QFY19 4QFY18 YoY (%) 3QFY19 QoQ (%) FY17 FY18 FY19P FY20E FY21E Net Revenues 11,538 10,917 5.7 10,994 4.9 39,818 41,880 44,646 49,168 54,174 EBITDA 3,104 3,077 0.9 3,145 (1.3) 9,444 11,125 12,361 13,966 15,849 APAT 2,002 1,970 1.6 1,921 4.2 5,774 6,816 7,542 8,551 9,872 Diluted EPS (Rs) 7.4 7.2 1.6 7.1 4.2 21.2 25.0 27.7 31.4 36.3 P/E (x)

55.6 47.1 42.6 37.6 32.5

EV / EBITDA (x)

33.7 28.4 25.7 22.5 19.6 Core RoCE (%)

64.5 64.4 67.2 72.4 80.8

Source: Company, HDFC sec Inst Research

INDUSTRY FMCG CMP (as on 27 May 2019) Rs 1,180 Target Price Rs 1,227 Nifty 11,925 Sensex 39,683 KEY STOCK DATA Bloomberg CLGT IN No. of Shares (mn) 272 MCap (Rs bn) / ($ mn) 321/4,617 6m avg traded value (Rs mn) 609 STOCK PERFORMANCE (%) 52 Week high / low Rs 1,365/1,018 3M 6M 12M Absolute (%) (6.6) (4.7) (5.3) Relative (%) (17.1) (16.5) (18.9) SHAREHOLDING PATTERN (%) Dec-18 Mar-19 Promoters 51.00 51.00 FIs & Local MFs 11.93 10.18 FPIs 13.86 15.37 Public & Others 23.21 23.45 Pledged Shares (% of total shares) - -

Source : BSE

Naveen Trivedi [email protected] +91-22-6171-7324

Siddhant Chhabria [email protected] +91-22-6171-7336

COLGATE-PALMOILIVE: RESULTS REVIEW 4QFY19

Page | 2

Quarterly Financials Particulars (Rs mn) 4QFY19 4QFY18 YoY (%) 3QFY19 QoQ (%) FY19 FY18 YoY (%) Net Revenue 11,538 10,917 5.7 10,994 4.9 44,624 41,880 6.6 Material Expenses 4,088 3,748 9.1 3,833 6.7 15,586 14,899 4.6 Employee Expenses 735 758 (3.1) 711 3.3 2,959 3,059 (3.3) ASP Expenses 1,563 1,436 8.9 1,260 24.0 5,647 5,268 7.2 Other Operating Expenses 2,048 1,898 7.9 2,045 0.1 8,072 7,528 7.2 EBITDA 3,104 3,077 0.9 3,145 (1.3) 12,361 11,125 11.1 Depreciation 394 405 (2.8) 406 (3.1) 1,592 1,565 1.7 EBIT 2,711 2,672 1.5 2,739 (1.0) 10,769 9,560 12.6 Other Income 120 83 43.8 79 51.1 377 387 (2.6) PBT 2,830 2,755 2.7 2,818 0.5 11,146 9,947 12.1 Exceptional (36) (117) na - na 305 (117) PBT after exceptional 2,794 2,639 5.9 2,818 (0.8) 11,451 9,830 16.5 Tax 793 751 5.6 897 (11.5) 3,670 3,097 18.5 RPAT 1,976 1,888 4.7 1,921 2.9 7,756 6,734 15.2 APAT 2,002 1,970 1.6 1,921 4.2 7,542 6,816 10.7 EPS (adjusted) 7.4 7.2 1.6 7.1 4.2 27.7 25.1 10.7 Source: Company, HDFC sec Inst Research

Margin Analysis Particulars 4QFY19 4QFY18 YoY (bps) 3QFY19 QoQ (bps) FY19 FY18 YoY (bps) Material Expenses % Net Sales 35.4 34.3 110 34.9 57 34.9 35.6 (65) Employee Expenses % Net Sales 6.4 6.9 (58) 6.5 (10) 6.6 7.3 (67) ASP Expenses % Net Sales 13.5 13.1 39 11.5 208 12.7 12.6 8 Other Operating Expenses % Net Sales 17.7 17.4 36 18.6 (86) 18.1 18.0 11 EBITDA Margin (%) 26.9 28.2 (128) 28.6 (170) 27.7 26.6 113 Tax Rate (%) 28.4 28.5 (7) 31.8 (343) 32.0 31.5 55 APAT Margin (%) 17.1 17.3 (17) 17.5 (35) 17.4 16.1 130 Source: Company, HDFC sec Inst Research

Revenue growth of 6% (exp 8%) was driven by 5% volume growth (7% exp) Management states that market share was flat during 2HFY19 Gross margins were under pressure due to increased promotional intensity


Page | 3

Net Revenue Volume Growth

Source: Company, HDFC sec Inst Research Note: 1QFY16-4QFY16 growth is based on old AS


Gross Margin Change EBITDA Margin Change

Source: Company, HDFC sec Inst Research Note: 1QFY16-4QFY16 change is based on old AS

Source: Company, HDFC sec Inst Research Note: 1QFY16-4QFY16 change is based on old AS

Volume growth was driven by increased promotional intensity. Co is focusing on stabilising market share Colgate enjoyed benign commodity inflation in 1HFY19 resulting in gross margin expansion EBITDA margin declined after 7 quarters of consecutive expansion

(15.0)

(10.0)

(5.0)

-

5.0

10.0

15.0

20.0

25.0

-

3,000

6,000

9,000

12,000

3QFY

164Q

FY16

1QFY

172Q

FY17

3QFY

174Q

FY17

1QFY

182Q

FY18

3QFY

184Q

FY18

1QFY

192Q

FY19

3QFY

194Q

FY19

Net Sales YoY Growth - RHS

(Rs mn) (%)

1

6 6 4

(12)

(3)(5)

(1)

12

4 4 7 7

5

(15)

(10)

(5)

-

5

10

15

3QFY

16

4QFY

16

1QFY

17

2QFY

17

3QFY

17

4QFY

17

1QFY

18

2QFY

18

3QFY

18

4QFY

18

1QFY

19

2QFY

19

3QFY

19

4QFY

19

(%)

120

34

139 91 76

142 108

41

130

304 255

136

(5)

(110)(210)

(100)

10

120

230

340

3QFY

16

4QFY

16

1QFY

17

2QFY

17

3QFY

17

4QFY

17

1QFY

18

2QFY

18

3QFY

18

4QFY

18

1QFY

19

2QFY

19

3QFY

19

4QFY

19

(bps)

326

(211)(105)

(35)(47)(21)

183 171 286

464 436

51 127

(128)(300)

(50)

200

450

700

3QFY

16

4QFY

16

1QFY

17

2QFY

17

3QFY

17

4QFY

17

1QFY

18

2QFY

18

3QFY

18

4QFY

18

1QFY

19

2QFY

19

3QFY

19

4QFY

19

(bps)


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Employee Expense Advertising Expense



Gross Margin EBITDA Margin

Source: Company, HDFC sec Inst Research Source: Company, HDFC sec Inst Research

Colgate has rationalised its employee and advertising spend to drive EBITDA growth

9 13

16

26

(1)

2

(2)

13 15

(1)

3

(7) (5) (3)

4.0

5.0

6.0

7.0

8.0

(25)

(10)

5

20

35

3QFY

16

4QFY

16

1QFY

17

2QFY

17

3QFY

17

4QFY

17

1QFY

18

2QFY

18

3QFY

18

4QFY

18

1QFY

19

2QFY

19

3QFY

19

4QFY

19

Employee Gr. (%) Employee (% of sales) - RHS(%)

(11)

28 24

28

(21)

24

(8) (7)

44

(0)

0

17

4 9

-2 4 6 8 10 12 14 16 18 20

(30)

-

30

60

3QFY

16

4QFY

16

1QFY

17

2QFY

17

3QFY

17

4QFY

17

1QFY

18

2QFY

18

3QFY

18

4QFY

18

1QFY

19

2QFY

19

3QFY

19

4QFY

19

Advertising Gr. (%) Advertising (% of sales) - RHS(%)

24.9

23.8

20.9

26.0

24.5

23.5

22.7

27.7

27.3

28.2

27.0

28.2

28.6

26.9

10.0

15.0

20.0

25.0

30.0

3QFY

16

4QFY

16

1QFY

17

2QFY

17

3QFY

17

4QFY

17

1QFY

18

2QFY

18

3QFY

18

4QFY

18

1QFY

19

2QFY

19

3QFY

19

4QFY

19

(%)

63.1

61.2

62.3

63.0

63.9

62.6

63.4

63.4

65.2

65.7

65.9

64.8

65.1

64.6

57.0

59.0

61.0

63.0

65.0

67.0

3QFY

16

4QFY

16

1QFY

17

2QFY

17

3QFY

17

4QFY

17

1QFY

18

2QFY

18

3QFY

18

4QFY

18

1QFY

19

2QFY

19

3QFY

19

4QFY

19

(%)


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Colgate’s Toothpaste Market Share Colgate’s Toothbrush Market Share

Source: Company, HDFC sec Inst Research Source: Company, HDFC sec Inst Research

The management states that market share decline has been arrested in 2HFY19 Market share declines for Colgate in toothpaste have come from its premium segment (Colgate Sensitive and Colgate Total). The premium segment revenue contribution is at ~4% vs. ~8% earlier Colgate continued to face intense competition in the naturals segment (25% mix for industry) which is dominated by Dabur and Patanjali (80% combined share)

57.6

57

.3

55.3

55

.9

55.7

55

.4

55.1

54

.3

54.0

53

.7

53.4

52

.4

52.5

52

.2

52.2

49.0 50.0 51.0 52.0 53.0 54.0 55.0 56.0 57.0 58.0 59.0

2QFY

163Q

FY16

4QFY

161Q

FY17

2QFY

173Q

FY17

4QFY

171Q

FY18

2QFY

183Q

FY18

4QFY

181Q

FY19

2QFY

193Q

FY19

4QFY

19

(%)

43.3

43.8

45.8

46.8

46

.6

47.0

47.4

45.0

45.5

45

.1

44.8

44.6

44.2

46.6

48.0

40.0

41.0

42.0

43.0

44.0

45.0

46.0

47.0

48.0

49.0

2QFY

16

3QFY

16

4QFY

16

1QFY

17

2QFY

17

3QFY

17

4QFY

17

1QFY

18

2QFY

18

3QFY

18

4QFY

18

1QFY

19

2QFY

19

3QFY

19

4QFY

19

(%)


Page | 6

Toothpaste Market Share

Source: Company, HDFC sec Inst Research Toothbrush Market Share


33.438.4 38.2 35.9

39.8 41.5 43.0 44.447.3 45.1 45.2

11.4 11.914.8

17.8 18.8 18.4 18.4 17.414.6 14.2 15.2

5.9 6.4 7.2 7.2 6.7 7.5 8.0 9.3 10.7 11.0 9.90.0

10.0

20.0

30.0

40.0

50.0

60.0

CY08 CY09 CY10 CY11 CY12 CY13 CY14 CY15 CY16 CY17 CY18

Colgate Competitor 1 Competitor 2(%)

Sharp decline in toothpaste market share during CY15-18 has started stabilizing in 2HFY19 Toothbrush exit volume market share in Mar’19 was at ~48%

48.8 49.452.2 53.3 52.7 54.5 56.1 56.8 57.2 55.5 53.6 52.4

25.1 24.6 22.8 22.6 23.3 23.5 22.8 21.7 19.8 19.2 17.7 17.3

11.9 12.2 12.9 13.7 14.8 14.0 13.4 13.4 14.0 15.3 15.415.1

0.0 0.1 0.4 0.6 1.2 2.9 6.8 8.6

0.0

10.0

20.0

30.0

40.0

50.0

60.0

CY07 CY08 CY09 CY10 CY11 CY12 CY13 CY14 CY15 CY16 CY17 CY18

Colgate Competitor 1 Competitor 2 Competitor 3(%)


Page | 7

Per Capita Consumption


Assumptions

FY17 FY18 FY19P FY20E FY21E Toothpaste revenue growth 3.7 7.4 6.8 9.9 10.0 Toothpaste volume growth (2.0) 2.5 5.8 7.3 7.3 GM (%) 62.9 64.4 65.1 65.3 65.8 Employee (% of sales) 7.2 7.3 6.6 6.4 6.3 ASP (% of sales) 12.9 12.6 12.7 12.8 12.8 Distribution (% of sales) 3.6 3.1 3.0 3.0 3.0 Royalty (% of sales) 5.2 4.9 4.9 4.9 4.9 Other expenses (% of sales) 10.3 9.9 10.2 9.7 9.5 EBITDA Margin (%) 23.7 26.6 27.7 28.4 29.3 Tax Rate (%) 32.2 31.5 32.1 32.1 32.1 Source: Company, HDFC sec Inst Research

We expect oral care category growth to accelerate to 6-8% volume growth with a pick-up in rural consumption (revert to mean i.e. 1.5x urban growth vs 1.3x currently). We build ~7% volume growth in FY20E/21E.

603

458

312

212158

0

100

200

300

400

500

600

700

Brazil USA Philipines China India


Page | 8

Change In Estimates

NEW OLD Change (%)

FY19E FY20E FY21E FY19E FY20E FY21E FY19E FY20E FY21E Net Sales 44,646 49,168 54,174 44,895 49,698 55,041 -0.6% -1.1% -1.6% EBITDA 12,361 13,966 15,849 12,585 14,422 16,412 -1.8% -3.2% -3.4% PAT 7,542 8,551 9,872 7,577 8,771 10,145 -0.5% -2.5% -2.7% EPS 27.7 31.4 36.3 27.8 32.2 37.3 -0.5% -2.5% -2.7% Source: HDFC sec Inst Research Peer Set Comparison

Company MCap

(Rs bn)

CMP (Rs) Reco. TP

(Rs)

EPS (Rs) P/E (x) EV/EBITDA (x) Core RoCE (%)

FY19E FY20E FY21E FY19E FY20E FY21E FY19E FY20E FY21E FY19E FY20E FY21E

HUL 3,764 1,772 NEU 1,804 28.1 33.4 40.7 63.0 53.1 43.5 42.3 38.7 30.2 68.3 28.3 21.9 ITC 3,300 291 BUY 398 10.4 11.3 12.4 27.9 25.7 23.4 17.9 16.0 14.4 39.2 40.9 43.7 Nestle 1,064 11,036 NR 11,064 167.1 206.5 245.9 66.0 53.4 44.9 37.9 32.5 27.7 82.1 101.4 121.4 Dabur 705 400 BUY 464 8.2 10.2 12.2 48.8 39.1 32.8 39.1 32.1 27.1 47.5 55.4 61.6 Britannia 695 2,897 NEU 3,101 48.1 56.6 68.9 60.2 51.2 42.0 39.4 32.7 26.9 39.2 41.4 46.1 Marico 472 366 BUY 378 7.2 8.9 10.8 50.7 40.9 33.8 36.7 30.0 25.5 48.8 47.6 54.4 Colgate 321 1,180 NEU 1,227 27.7 31.4 36.3 42.6 37.6 32.5 25.7 22.5 19.6 67.2 72.3 80.6 Jub. Food 176 1,334 BUY 1,739 24.1 30.9 37.8 55.4 43.2 35.3 28.2 22.5 18.5 45.8 57.6 68.3 Emami 162 356 BUY 506 11.0 13.5 15.8 32.4 26.4 22.6 21.9 18.5 15.8 21.5 28.1 34.5 Source: HDFC sec Inst Research

COLGATE-PALMOLIVE : RESULTS REVIEW 4QFY19

Page | 9

Income Statement (Rs mn) FY17 FY18 FY19P FY20E FY21E Net Revenues 39,818 41,880 44,646 49,168 54,174 Growth (%) 2.9 5.2 6.6 10.1 10.2 Material Expenses 14,763 14,901 15,586 16,778 18,236 Employee Expense 2,885 3,059 2,959 3,257 3,589 ASP Expense 5,117 5,268 5,647 6,294 6,934 Distribution Expense 1,424 1,315 1,339 1,475 1,625 Other Expenses 6,185 6,211 6,755 7,399 7,940 EBITDA 9,444 11,125 12,361 13,966 15,849 EBITDA Growth (%) 0.7 17.8 11.1 13.0 13.5 EBITDA Margin (%) 23.7 26.6 27.7 28.4 29.3 Depreciation 1,332 1,565 1,592 1,781 1,971 EBIT 8,112 9,560 10,769 12,185 13,878 Other Income (Inc. EO Items) 403 270 682 437 690 Interest - - 25 25 25 PBT 8,514 9,830 11,426 12,597 14,544 Total Tax 2,740 3,097 3,670 4,046 4,671 RPAT 5,774 6,734 7,756 8,551 9,872 Exceptional Gain/(loss) - (83) 213 - - Adjusted PAT 5,774 6,816 7,542 8,551 9,872 APAT Growth (%) (4.2) 18.0 10.7 13.4 15.5 Adjusted EPS (Rs) 21.2 25.0 27.7 31.4 36.3 EPS Growth (%) (4.2) 18.0 10.7 13.4 15.5


Balance Sheet (Rs mn) FY17 FY18 FY19P FY20E FY21E SOURCES OF FUNDS Share Capital - Equity 272 272 272 272 272 Reserves 12,466 14,974 14,654 17,964 21,147 Total Shareholders’ Funds 12,738 15,246 14,927 18,236 21,419 Long Term Debt - - 777 777 777 Short Term Debt - - - - - Total Debt - - 777 777 777 Net Deferred Taxes 275 355 309 309 309 Other Non-current Liabilities & Provns 268 209 201 201 201

TOTAL SOURCES OF FUNDS 13,281 15,811 16,213 19,523 22,706 APPLICATION OF FUNDS Net Block 11,081 11,460 11,909 12,087 12,116 CWIP 1,666 1,586 1,987 1,987 1,987 Other Non-current Assets 1,865 1,978 1,903 2,557 2,817 Total Non-current Assets 14,612 15,024 15,798 16,631 16,920 Inventories 2,926 2,267 2,486 2,737 3,016 Debtors 1,299 2,010 2,098 2,310 2,546 Other Current Assets 1,015 1,465 1,611 1,772 1,950 Cash & Equivalents 3,255 4,873 4,730 7,537 10,765 Total Current Assets 8,494 10,615 10,925 14,357 18,276 Creditors 5,975 6,145 6,132 6,686 7,279 Other Current Liabilities & Provns 3,851 3,683 4,378 4,780 5,212 Total Current Liabilities 9,826 9,828 10,510 11,466 12,490 Net Current Assets (1,332) 788 415 2,891 5,786 TOTAL APPLICATION OF FUNDS 13,281 15,811 16,213 19,523 22,706



Page | 10

Cash Flow Statement (Rs mn) FY17 FY18 FY19P FY20E FY21E Reported PBT 8,514 9,947 11,426 12,597 14,544 Non-operating & EO Items 28 81 - - - Interest Expenses (292) (290) 25 25 25 Depreciation 1,332 1,565 1,592 1,781 1,971 Working Capital Change 311 (889) 620 (123) 297 Tax Paid (3,014) (3,474) (3,670) (4,046) (4,671) OPERATING CASH FLOW ( a ) 6,880 6,939 9,992 10,234 12,165 Capex (3,213) (2,087) (2,442) (2,000) (2,000) Free Cash Flow (FCF) 3,667 4,852 7,550 8,234 10,165 Investments (506) (273) - - - Non-operating Income 297 287 (312) (198) (219) INVESTING CASH FLOW ( b ) (3,421) (2,073) (2,754) (2,198) (2,219) Debt Issuance/(Repaid) - - 777 - - FCFE 3,458 4,866 8,016 8,036 9,946 Share Capital Issuance - - - - - Dividend (3,271) (3,705) (7,862) (5,241) (6,689) Others (135) (92) (298) (29) (29) FINANCING CASH FLOW ( c ) (3,406) (3,798) (7,382) (5,270) (6,718) NET CASH FLOW (a+b+c) 53 1,068 (144) 2,767 3,228 EO Items, Others (4) (550) - - - Closing Cash & Equivalents 2,943 4,562 4,418 7,185 10,413


Key Ratios FY17 FY18 FY19P FY20E FY21E PROFITABILITY (%) GPM 62.9 64.4 65.1 65.9 66.3 EBITDA Margin 23.7 26.6 27.7 28.4 29.3 EBIT Margin 20.4 22.8 24.1 24.8 25.6 APAT Margin 14.5 16.3 16.9 17.4 18.2 RoE 50.1 48.7 50.0 51.6 49.8 RoIC (or Core RoCE) 64.5 64.4 67.2 72.3 80.6 RoCE 49.1 47.9 48.1 48.7 47.4 EFFICIENCY Tax Rate (%) 32.2 31.5 32.1 32.1 32.1 Fixed Asset Turnover (x) 2.2 2.1 2.0 2.0 2.1 Inventory (days) 26.8 19.8 20.3 20.3 20.3 Debtors (days) 11.9 17.5 17.2 17.2 17.2 Other Current Assets (days) 9.3 12.8 13.2 13.2 13.1 Payables (days) 54.8 53.6 50.1 49.6 49.0 Other Current Liab & Provns (days) 35.3 32.1 35.8 35.5 35.1 Cash Conversion Cycle (days) (42.0) (35.6) (35.3) (34.5) (33.5) Net D/E (x) (0.3) (0.3) (0.3) (0.4) (0.5) Interest Coverage (x) na na na na na PER SHARE DATA (Rs) EPS 21.2 25.0 27.7 31.4 36.3 CEPS 26.1 30.8 33.6 38.0 43.5 Dividend 10.0 24.0 16.0 20.4 23.6 Book Value 46.8 56.0 54.8 67.0 78.7 VALUATION P/E (x) 55.6 47.1 42.6 37.6 32.5 P/BV (x) 25.2 21.1 21.5 17.6 15.0 EV/EBITDA (x) 33.7 28.4 25.7 22.5 19.6 EV/Revenues (x) 8.0 7.6 7.1 6.4 5.7 OCF/EV (%) 2.2 2.2 3.1 3.3 3.9 FCF/EV (%) 1.1 1.5 2.3 2.6 3.2 FCFE/Mkt Cap (%) 1.1 1.5 2.5 2.5 3.1 Dividend Yield (%) 0.8 2.0 1.4 1.7 2.0



Page | 11

RECOMMENDATION HISTORY

Rating Definitions BUY : Where the stock is expected to deliver more than 10% returns over the next 12 month period NEUTRAL : Where the stock is expected to deliver (-)10% to 10% returns over the next 12 month period SELL : Where the stock is expected to deliver less than (-)10% returns over the next 12 month period

Date CMP Reco Target 21-May-18 1,208 NEU 1,203

9-Jul-18 1,183 NEU 1,219 27-Jul-18 1,085 NEU 1,185 10-Oct-18 1,050 NEU 1,164 29-Oct-18 1,102 NEU 1,163 9-Jan-19 1,311 NEU 1,248

24-Jan-19 1,322 NEU 1,254 10-Apr-19 1,231 NEU 1,260 28-May-19 1,180 NEU 1,227

1,000

1,050

1,100

1,150

1,200

1,250

1,300

1,350

1,400

May

-18

Jun-

18

Jul-1

8

Aug-

18

Sep-

18

Oct

-18

Nov-

18

Dec-

18

Jan -

19

Feb-

19

Mar

-19

Apr-

19

May

-19

Colgate TP


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Disclosure: We, Naveen Trivedi, MBA & Siddhant Chhabria, PGDBM, authors and the names subscribed to this report, hereby certify that all of the views expressed in this research report accurately reflect our views about the subject issuer(s) or securities. HSL has no material adverse disciplinary history as on the date of publication of this report. We also certify that no part of our compensation was, is, or will be directly or indirectly related to the specific recommendation(s) or view(s) in this report. Research Analyst or his/her relative or HDFC Securities Ltd. does not have any financial interest in the subject company. Also Research Analyst or his relative or HDFC Securities Ltd. or its Associate may have beneficial ownership of 1% or more in the subject company at the end of the month immediately preceding the date of publication of the Research Report. 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HSL or its associates might have received any compensation from the companies mentioned in the report during the period preceding twelve months from t date of this report for services in respect of managing or co-managing public offerings, corporate finance, investment banking or merchant banking, brokerage services or other advisory service in a merger or specific transaction in the normal course of business. HSL or its analysts did not receive any compensation or other benefits from the companies mentioned in the report or third party in connection with preparation of the research report. Accordingly, neither HSL nor Research Analysts have any material conflict of interest at the time of publication of this report. Compensation of our Research Analysts is not based on any specific merchant banking, investment banking or brokerage service transactions. HSL may have issued other reports that are inconsistent with and reach different conclusion from the information presented in this report. Research entity has not been engaged in market making activity for the subject company. Research analyst has not served as an officer, director or employee of the subject company. We have not received any compensation/benefits from the subject company or third party in connection with the Research Report. HDFC securities Limited, I Think Techno Campus, Building - B, "Alpha", Office Floor 8, Near Kanjurmarg Station, Opp. Crompton Greaves, Kanjurmarg (East), Mumbai 400 042 Phone: (022) 3075 3400 Fax: (022) 2496 5066 Compliance Officer: Binkle R. Oza Email: [email protected] Phone: (022) 3045 3600 HDFC Securities Limited, SEBI Reg. No.: NSE-INB/F/E 231109431, BSE-INB/F 011109437, AMFI Reg. No. ARN: 13549, PFRDA Reg. No. POP: 04102015, IRDA Corporate Agent License No.: HDF 2806925/HDF C000222657, SEBI Research Analyst Reg. 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