Colgate
For the first quarter ended 30th June 2014, Colgate posted a very disappointing set of numbers, with net profit coming down 27% at Rs.135 crore but if one were to adjust the exceptional item of previous Q1, the growth in net profit was at 4.5%. The only positive in the numbers was the rise in EBITDA margin at 20.4%, up from 19.6% (YoY) and this was mainly on account of 6% drop in employee cost. The company has stated that margins improved on account of better efficiencies, lower costs and prudent price rise.
The poor performance has been on account of increased competition from P&G, which has also got into toothpaste business. Its toothpaste volume did rise, it grew during the quarter at 5% but that is much lower than the growth of around 11% to 7% during the previous quarters. It continues to retain its leadership position – it has a market share of 57% in toothpaste – an increase of 110 bps over previous Q1 and 42.6% in toothbrush - an increase of 140 bps YoY. Yet increased competition in the coming months is expected to keep growth pretty much leashed.