While Nomura has a “reduce” rating on the stock, Goldman Sachs and Citi have a “sell” recommendation. HSBC and Nuvama have a “hold” and “buy” rating, respectively. Here’s a look at what these brokerages said:
Nomura
The brokerage has a “reduce” rating on the stock with a price target of ₹2,350 per share, which is just a percent below its last closing price of ₹2,375.9 apiece.
Nomura said Colgate’s first quarter earnings were below estimates, with volumes declining between 3% and 4% and earnings before interest taxes depreciation and amortisation (EBITDA) declining 11% from the previous year.
It said weak demand and a high base lead to the volume decline. The new launches, innovations continue to drive premiumisation, it added.
The company’s margins are under pressure due to higher promotions and negative operating leverage, Nomura said.
Goldman Sachs
Goldman Sachs has a “sell” rating on the stock with a price target of ₹2,300 per share, implying a downside of 3.2% from its previous closing price.
It said that the company reported a weaker-than-expected first quarter with 4% decline in revenue from the previous year, which was 2.5% below what the brokerage had anticipated.
Colgate’s gross EBITDA declined 11% from the previous year, which was 4% below Goldman Sachs’ estimates and its profit after tax (PAT) was down 12% from the previous year.
The brokerage said the 11% EBITDA decline was despite reducing ad spends, as gross margins declined as well.
It has lowered the company’s earnings estimates for financial year 2026 and financial year 2027 by 3% and 4%, respectively.
Citi
Citi too has a “sell” rating on the stock and cut tis price target to ₹2,175 from ₹2,300 per share.
The weakness this quarter, according to the management, was driven by:
- Tough operating conditions due to subdued urban demand
- Elevated competitive intensity, driving increased trade promotions and hence a decline in realisation
- Off a high base. The company’s revenue grew 13% in the June quarter last fiscal.
The brokerage expects weak performance to continue in the near-term, with the mentioned challenges to persist in the second quarter as well, and potentially only gradually moderate in the second half of this fiscal.
HSBC
HSBC has a “hold” rating on the stock with a price target of ₹2,600 per share, implying a potential upside of 9.4% from its previous close.
HSBC said Colgate expects a gradual recovery in the second half of FY26. It expects improvement, but structural growth potential remains low.
Nuvama
Nuvama has a “buy” rating on the stock with a price target of ₹3,135 per share, which implies an upside potential of 31.9% from its previous close.
It said toothpaste volume declined 2% on a base of 8% – 9%. For context, Dabur’s oral care likely grew 5% from the previous year in the June quarter due to rural salience and a slight catch-up sequentially.
Nuvama said Colgate’s gross / EBITDA margin contracted 172 basis points and 241 basis points, respectively, which was a reflection of higher promotional intensity and lack of operating leverage.
It continues to expect recovery in the second half of this fiscal.
Of the 34 analysts that have coverage on the stock, 10 have a “buy” rating and 12 each have “hold” and “sell” ratings.
The stock ended the previous session 0.67% lower. It has declined 12% this year, so far.
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