Colgate Palmolive Feels the Heat After Weak Q1 Numbers
Shares of Colgate Palmolive dropped more than 2% to ₹2,320 on July 23, 2025, as investors reacted to a weaker-than-expected start to the financial year. The company reported an 11.8% drop in net profit, landing at ₹321 crore compared to the same quarter the year before. Revenue didn't fare much better—down 4.4% to ₹1,421 crore. Operating margins took a hit too, shrinking by 240 basis points to 31.6%. Most of the blame falls on weak demand, steeper promotional spends, and high operating costs.
Top brokerages didn't pull any punches. Goldman Sachs and Citi both slapped 'sell' ratings on the stock. Nomura went from neutral to negative, slashing its stance down to 'Reduce' and setting a target price of ₹2,350. They pointed straight at declining volume—down 3-4% year on year—and intense pressure on EBITDA. Colgate’s business isn’t just suffering from consumers tightening their wallets; promotional offers and steady costs are eating away at the company’s profitability.
Split Opinions As Market Watches for Recovery
Nuvama, on the other hand, hasn’t given up hope. The broker kept its 'Buy' rating and a much higher target price of ₹3,135, betting on a strong bounce-back in the second half of the year. Their optimistic view sits in stark contrast to the broader analyst crowd, but they’re betting big on Colgate’s premium product launches and efforts to tap into new trends in the market—things like toothpaste with extra whitening, or products targeting younger shoppers.
Broker sentiment on Colgate is anything but united. Among 34 tracked analysts, opinions are exactly split: 10 say 'Buy,' 12 call for 'Hold,' while another 12 recommend 'Sell.' This divided house speaks volumes about the uncertainty over Colgate’s near-term prospects and its pricing strategies.
The pressure isn’t just local. Colgate’s global parent recently adjusted its goals for 2025, lowering expectations for both earnings and sales growth. Management is now aiming for low single-digit increases in adjusted EPS and organic sales, emphasizing just how tough the current environment is across many markets—not just India.
So what’s really bugging the business? Promotional spending is up as the company tries to drive volume in a sluggish market, but these discounts have squeezed profits. On top of that, higher input costs—from raw materials to packaging—haven’t let up. Meanwhile, the much-hoped-for boost from premium product lines is still playing catch-up. For now, the outlook remains foggy, and investors face a tricky decision: ride out the turbulence or look elsewhere for steadier gains?