Why Did Colgate-Palmolive (India) Report a 6.5% Drop in Q4 Net Profit?
Click to start listening
Synopsis
Colgate-Palmolive (India) Limited has reported a significant drop in Q4 net profit, raising questions about urban demand and competition. Despite challenges, the overall annual performance shows positive trends. Discover how the company plans to navigate these challenges and maintain its market position.
Key Takeaways
- Colgate-Palmolive's Q4 net profit decreased by 6.5%.
- Revenue dipped by 1.9% in the March quarter.
- EBITDA fell to Rs 498 crore, a 6.4% decline.
- Positive annual performance with a 6.3% increase in net sales for FY25.
- Dividend of Rs 27 per share announced.
Mumbai, May 21 (NationPress) Colgate-Palmolive (India) Limited announced a 6.5% decrease in its net profit, amounting to Rs 355 crore for the fourth quarter ending March 31, in contrast to Rs 379.8 crore during the same timeframe last fiscal (Q4 FY24).
This profit decline was attributed to diminished urban demand and escalating competition within the marketplace.
Additionally, revenue for the March quarter saw a slight dip of 1.9%, dropping to Rs 1,462.5 crore from the previous year.
Operating profit, or EBITDA (earnings before interest, taxes, depreciation, and amortisation), amounted to Rs 498 crore, reflecting a 6.4% decline from Rs 532.2 crore in the last financial year.
The company's EBITDA margin also contracted to 34%, down from 35.7% in the same quarter a year prior.
Despite the less-than-ideal performance in the March quarter, Colgate-Palmolive (India) recorded a positive overall financial performance for the entire year.
For the fiscal year 2024–25 (FY25), the company reported a 6.3% rise in net sales to Rs 5,999 crore, compared to Rs 5,644 crore in FY24.
Net profit for the entire year increased by 8.5% to Rs 1,437 crore, as indicated in its stock exchange filing.
Colgate has announced a second interim dividend of Rs 27 per share, to be distributed from June 16.
This follows the initial interim dividend of Rs 24 per share declared in October 2024 and disbursed in November 2024.
Colgate-Palmolive (India)'s Managing Director and CEO, Prabha Narasimhan, recognized that the second half of the year posed challenges, particularly in urban markets.
She noted that increasing competition also exerted pressure. However, she stressed that the company remains committed to its strategic priorities.
She added that their ‘funding the growth’ initiative has been instrumental in maintaining margin strength, and Colgate will persist in investing in the business despite short-term adversities.
Before the earnings announcement, shares of Colgate-Palmolive (India) finished 1.2% higher at Rs 2,662 on the Bombay Stock Exchange (BSE).
Point of View
We recognize the challenges faced by Colgate-Palmolive (India) Limited as they navigate a shifting market landscape. The decline in net profit highlights the need for adaptability in response to urban demand fluctuations and competition. Nonetheless, the positive annual performance indicates resilience and a strategic focus on future growth.
NationPress
01/06/2025
Frequently Asked Questions
What caused the decline in Colgate-Palmolive's Q4 net profit?
The decline was primarily due to slower urban demand and heightened competition in the market.
How did the company's revenue perform in Q4?
Revenue for the March quarter dipped by 1.9% to Rs 1,462.5 crore compared to the previous year.
What is the company's outlook for the next financial year?
Colgate-Palmolive anticipates continued growth, with a reported 6.3% increase in net sales for FY25.
What dividend has Colgate-Palmolive declared?
The company declared a second interim dividend of Rs 27 per share, payable from June 16.
How did Colgate's share price react before the earnings announcement?
Shares of Colgate-Palmolive (India) closed 1.2% higher at Rs 2,662 on the Bombay Stock Exchange.
