Buy Colgate, target of Rs 432: India Infoline

India Infoline has maintained its buy rating on Colgate Palmolive (India) with a target of Rs 432 in its October 27, 2008 research report. "Colgate recorded 13.4% yoy growth in revenues at Rs 4.13 billion during Q2 FY09, marginally below our expectations of Rs 4.2 billion led by overall volume growth of 11.1% yoy. Aided by higher income (Rs 270 million against Rs 199 millionn during Q2 FY08) and sharp decline in the effective tax rate (11.9% against 22.4% in same quarter last year), net profit rose by 16% yoy to Rs 635 million (below our expectations of Rs 698 million)."

"Colgate dominates the oral care industry with a strong 50% market share. After a healthy 10% growth in FY08, we expect Colgate to continue industry outperformance in FY09 (Industry growth expected 10%). With successful new launches and re-launches coupled with the fiscal benefits from the Baddi plant, we expect Colgate to witness revenue and profit CAGR of 11.9% and 17.5% respectively over the next two years. At the current market price of Rs 382, the stock is trading at 16.2x FY10E EPS of Rs 23.6. We maintain Buy with a price target of Rs 432, an upside of 13.3%," says India Infoline's research report.

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Source: Moneycontrol