1. At a Glance
Colgate-Palmolive (India) Ltd (COLPAL) is the stock market’s equivalent of that topper kid who aces exams but still gets bullied for being too nerdy. With anROE of 158%,ROCE of 179%, and aP/E of 136, the company is basically minting cash from toothpaste tubes while investors debate whether they’re paying for toothpaste or unicorn glitter. Colgate owns over51% market share in toothpaste,48% in toothpowder, and30% in toothbrushes, making it India’s official Oral Hygiene Department since the 90s. The only cavity here? The stock trades at 177× book value, which makes it more expensive than Ranveer Singh’s dentist.
2. Introduction
Colgate-Palmolive India isn’t just selling toothpaste; it’s selling national identity. If your bathroom doesn’t have a Colgate tube, you’re either lying or brushing with neem twigs in a village experiment. With an88% household penetration, Colgate has turned itself into a verb—people don’t say “toothpaste,” they say “Colgate.”
But here’s the fun part: while it dominates the shelves, its stock is currently sulking on Dalal Street. Over the last one year, the share price hasfallen 39%, wiping out more enamel than a bottle of fizzy cola. Investors are questioning if they’re buying a toothpaste company or a royalty ATM machine for its American parent, which happily collects ~₹222 crore in royalties annually.
And marketing? Oh, Colgate spends a jaw-dropping13% of revenue on ads, featuring Shahid Kapoor, Rana Daggubati, and Ranveer Singh—because apparently, cavities respect Bollywood endorsements. From IPL sponsorships to “Dental Veer” campaigns, Colgate has turned brushing into Bollywood.
The new push?Face cleansers under Palmolive—because once you own the mouth, why not colonize the face?
3. Business Model (WTF Do They Even Do?)
Colgate’s business model is as boringly effective as brushing twice a day:
- Core Portfolio:Toothpaste, toothpowder, toothbrushes, and mouthwash.
- New Growth Areas:Palmolive personal care products, whitening strips, and oral beauty.
- R&D Muscle:A Mumbai-based lab with900 scientists,10,000 patents studied, and900 patents filed annually.That’s more patents than actual SKUs in your local Kirana store.
- Distribution Reach:1.6 million storesplus248 exclusive smile stores.And a shiny new AI tool,AmaZing, that lets merchandisers fix stock gaps with
- selfies.
- E-commerce Presence:From Amazon to Nykaa, Colgate is everywhere. Even your milkman’s UPI QR code probably accepts Colgate coupons now.
- Parent Company Dependence:51% promoter stake by Colgate USA, which collects royalties while Indian investors debate P/E multiples like cricket commentators.
Verdict: It’s a cash cow dressed as a toothpaste tube.
4. Financials Overview
Annual Snapshot (FY25)
| Metric | FY25 | FY24 | YoY % |
|---|---|---|---|
| Revenue (₹ Cr) | 1,960 | 1,698 | 15.4% |
| EBITDA (₹ Cr) | 435 | 287 | 51.6% |
| PAT (₹ Cr) | 432 | 288 | 50.2% |
| EPS (₹) | 16.0 | 10.5 | 52.4% |
Annualised EPS:₹16 × 4 = ₹64. At CMP ₹2,154 →P/E ~33.6 (adjusted). Screener’s 136 is a TTM distortion.
Commentary: Revenue growth is modest (15%), but PAT growth is a superstar at 50%. This is toothpaste alchemy—turning slow volume growth into shiny PAT with premium pricing and royalty magic.
5. Valuation (Fair Value RANGE only)
- P/E Method:Adjusted EPS ~₹64, assign FMCG band of 30–45× →₹1,920 – ₹2,880.
- EV/EBITDA Method:EV ~₹58,243 Cr, EBITDA ~₹530 Cr (TTM), EV/EBITDA ~110× (ouch). Industry peers at 25–35× →₹1,500 – ₹2,400.
- DCF:12% growth, 10% discount →₹1,900 – ₹2,600.
👉Fair Value Range: ₹1,900 – ₹2,600.Disclaimer: FV is for educational purposes only, not investment advice.
6. What’s Cooking – News, Triggers, Drama
- Korean Pop Invasion:Partnered with Korean singer IU to promote Visible White Purple toothpaste. Apparently, cavities now fear K-pop.
- Dentist Campaigns:LaunchedDental Veeranthem
