Share Market Live

NSE

Packaged consumer goods company Colgate-Palmolive (India) is looking to expand into the personal care segment and is open to inorganic opportunities in the sector, the company mentioned in the first analyst meeting under new leader Prabha Narasimhan. The company also said it would launch a platform called DentistFirst and venture into the kids' toothpaste category.

Prabha Narasimhan took over as managing director and chief executive officer of the oral care company on September 1. Narasimhan told CNBC-TV18 that the key goal for the company is to drive performance and keep up with the environmental changes. She said Colgate-Palmolive (India) is the highest-penetrated brand in the country.

Key takeaways from the analyst meet

In her first analyst meeting, Narasimhan spelt out the roadmap for growth.

The key focus areas for the company are per capita consumption which needs to be increased. Data shows that in India, the per capita consumption of toothpaste is 1X, in the Philippines, it is 1.8X, and in Brazil, it is 3.1X.

Data suggests that 55 percent of rural Indians do not brush their teeth even once a day — which is what Colgate-Palmolive (India) wants to focus on.

The key focus area for the company is toothbrush replacement. According to data by Colgate-Palmolive (India), in Urban India, the toothbrush replacement duration is six months, while in rural India, it is 15 months. The company recommended replacement is three months, and Colgate-Palmolive will keep that in focus to increase sales.

The four strategies the company said it would abide by:

Lead toothpaste category growth

Premiumisation through science and innovation

Lead category growth in toothbrushes and devices

Build a personal care range

Other than that, on expansion, the company is planning to set up a business-to-business platform called DentistFirst and is also keen on entering the kids' toothpaste category.

Also read: Meet Prabha Narasimhan, first external candidate to steer Colgate India in 12 years

Brokerage house Citi maintains a sell call on the shares of Colgate with a target price of Rs 1,650/share. The brokerage house has noted that focus on both volume growth and premiumisation is likely a tall ask.

Nomura on the other hand, maintained a neutral call on the shares of the company with a target price of Rs 1,600.

In February, the company announced launching a range of Palmolive face care products, including face foams, gels, scrubs and masques for capturing consumer demand at the premium end of the skincare market in India.

Meanwhile, global brokerage firm Jefferies expects the management to prioritise market share. According to Jefferies, with the strategies of Colgate-Palmolive (India) to expand in personal care, the company is eyeing growth opportunities in the non-oral care business.

The Colgate Palmolive India stock drifts lower as analysts remain circumspect of the new ceo’s growth plan.

Also read: Colgate profit jumps 3.3% beating street estimates

First Published:Dec 13, 2022 5:17 PM IST