1. At a Glance
Colgate India just dropped its Q1 FY26 results and—spoiler alert—the toothpaste giant is not exactly grinning. Sales dipped 4.4%, profit slid 11.9%, but margins held their own at a sparkly 32%. Meanwhile, your dentist still approves.
2. Introduction with Hook
If FMCG were a cricket team, Colgate would be that stoic Rahul Dravid—reliable, consistent, but a bit too safe sometimes. While peers like Godrej Consumer and Gillette are swinging big, Colgate’s brushing off innovation and sticking to its classic strokes.
- Q1 Sales: ₹1,434 Cr (–4.4%)
- Q1 PAT: ₹321 Cr (–11.9%)
- ROCE: 105% — Yup, triple digits, not a typo
In a market obsessed with growth, Colgate seems happy showing off its pearly white profits instead.
3. Business Model (WTF Do They Even Do?)
Colgate’s biz model is so clean, it could double as a compliance manual:
- Core Products: Toothpaste, Toothbrush, Toothpowder, Mouthwash, and Palmolive personal care range
- Brands: Colgate Strong Teeth, Colgate Vedshakti, Palmolive Body Wash, etc.
- Moat: Brand recall so strong, it became a noun. No one asks for “toothpaste,” they ask for “Colgate.”
They manufacture, distribute, and market across 7,000+ stockists and modern retail, with massive rural penetration.
4. Financials Overview
Q1 FY26 Snapshot (Standalone ₹ Cr):
| Metric | Q1 FY26 | QoQ (%) | YoY (%) |
|---|---|---|---|
| Revenue | 1,434 | –2.0% | –4.4% |
| Operating Profit | 453 | –9.0% | +8.4% |
| Net Profit | 321 | –9.6% | –11.9% |
| EPS | 11.79 | Down | |
| OPM | 32% | Stable |
TTM Revenue: ₹5,978 Cr
TTM PAT: ₹1,393 Cr
Market Cap: ₹64,670 Cr
5. Valuation
Current Price: ₹2,378
EPS (TTM): ₹51.23
P/E: 46.4x
Book Value: ₹61.2
P/B: 38.8x (Someone call the valuation cops)
Fair Value Range:
| Method | FV Range (₹) |
|---|---|
| Historical P/E (35–40x) | 1,800–2,050 |
| Dividend Yield Anchoring (2–2.5%) | 2,100–2,500 |
| EV/EBITDA (based on avg 20x) | 2,100–2,300 |
Verdict: Not cheap. You’re paying a premium for the moat, not the momentum.
6. What’s Cooking – News, Triggers, Drama
- Q1 Decline: Sales dipped YoY; pricing pressure, rural demand slowdown cited
- New Launches: Ayurvedic range & Palmolive body care push
- ESG Reports: Sustainability strategy highlighted (because brushing responsibly is a thing now)
- Dividend Darling: Payout remains over 95%
- Peer Heat: GCPL, Emami, even Mamaearth are chewing market share
7. Balance Sheet
FY25 Snapshot (₹ Cr):
| Particulars | Value |
|---|---|
| Equity Capital | 27 |
| Reserves | 1,637 |
| Total Borrowings | 61 |
| Total Assets | 3,019 |
| Fixed Assets + CWIP | 814 |
| Cash + Investments | 1,394 |
| Net Debt | Zero. (Net Cash = Clean like your enamel) |
8. Cash Flow – Sab Number Game Hai
| Year | CFO | CFI | CFF | Net Flow |
|---|---|---|---|---|
| FY23 | 1,176 | -8 | -1,087 | +82 |
| FY24 | 1,199 | +79 | -1,195 | +83 |
| FY25 | 1,394 | +56 | -1,671 | -221 |
Insight: Cash from operations is strong, financing outflows (dividends) dominate. Business throws off cash like a jet engine.
9. Ratios – Sexy or Stressy?
| Metric | FY25 |
|---|---|
| ROE | 81.2% |
| ROCE | 105% |
| Debtor Days | 14 |
| Inventory Days | 76 |
| Payable Days | 185 |
| CCC | –95 |
Colgate’s USP: Negative working capital = suppliers fund your business = FMCG finance god mode.
10. P&L Breakdown – Show Me the Money
| FY | Sales | OPM % | PAT | EPS |
|---|---|---|---|---|
| FY23 | 5,226 | 30% | 1,047 | 38.5 |
| FY24 | 5,680 | 33% | 1,324 | 48.7 |
| FY25 | 6,040 | 32% | 1,437 | 52.8 |
Note: Top line growth is meh, but profit margins are chef’s kiss.
11. Peer Comparison
| Company | P/E | OPM % | ROE % | Dividend Yield | Sales Growth |
|---|---|---|---|---|---|
| Colgate | 46.4 | 32% | 81.2 | 2.13% | 5.95% (5Y) |
| Dabur | 52.7 | 18.4% | 16.8 | 1.55% | 7% |
| GCPL | 67.9 | 21.0% | 15.2 | 1.21% | 8% |
| Gillette | 67.7 | 26.9% | 42.5 | 1.02% | 10%+ |
Conclusion: Colgate leads in ROE and margin, lags in topline innovation.
12. Miscellaneous – Shareholding, Promoters
| Category | % Holding (Q1 FY26) |
|---|---|
| Promoter | 51.00% |
| FIIs | 20.39% |
| DIIs | 9.34% |
| Public | 19.00% |
| No. of SHs | 3.05 lakh |
Trend: Slight uptick in DII holding, FII trimming after a peak of 24.9%.
13. EduInvesting Verdict™
Colgate is a fortress of margin, cash, and ROE. But it’s not exactly the life of the FMCG party anymore. Growth is… politely put, brushing against a ceiling.
Still, its negatives are relative—when your ROCE is 105% and debt is nil, you get leeway. Investors craving consistency (and a juicy dividend) might stick. Growth chasers? Might look elsewhere for sparkle.
Metadata
– Written by EduInvesting Team | 22 July 2025
– Tags: Colgate-Palmolive, Q1 FY26, FMCG, Personal Care, Dividend Stocks, Toothpaste King
