Sops Prop Colgate To 52-Week Highs

The Colgate-Palmolive scrip has been hogging the limelight during post-budget trading on both the Bombay Stock Exchange and the National Stock Exchange. With the budget proposing a reduction in the excise duty for a host of fast moving consumer goods, it is likely that the demand for such items will increase during the year ahead.

This resulted in a buying interest in the Colgate-Palmolive scrip. The budget has slashed excise duty on soaps to 18 per cent from 20 per cent, while customs levy on the same commodity has been brought down by 10 per cent to 40 percent from 50 per cent. The Colgate-Palmolive scrip opened firmer on Monday at the BSE and touched a 52-week high at Rs 359, before closing at Rs 355.6, registering a gain of Rs 15 from the previous close.

On the NSE, too, the company share touched its 52-week at Rs 345.6 and closed at Rs 345.6, notching up a gain of Rs 16 over the previous close.

Market sources said there was a lot of buying interest at the counter, especially from foreign institutional investors who were keen on picking up the scrip. On Tuesday, the stock touched its 52-week high once again on the NSE at Rs 351.3 and closed at the same level, logging in a rise of nearly Rs 6.

On the BSE, the scrip closed a tad upward, at Rs 356.5, as against the previous close of Rs 355.

Colgate-Palmol-ive has decided to pass on the benefits of excise and customs duty cuts to the consumers. The price of the company's dental cream of 250 gm has been pared to Rs 39.25 from Rs 40, and that of the 200 gm pack to Rs 33.25 from Rs 34. Colgate-Palmolive has also decided to slash the prices of Optima brand of shampoos to Rs 69.05 from Rs 72.

The scrip was much in demand and in the days to come, there will be a lot of trading interest witnessed in the scrip. The stock has seen huge volumes throughout the week, said a Mumbai-based analyst.

The other sop which the budget has showered on the company include, an excise cut of 2 per cent in toothpaste, a 2 per cent paring on hair oil and a 10 per cent excise reduction in cosmetics.

Analysts argue that the 10 per cent reduction in customs duty in not likely to effect the soap industry much, as the proportion of finished goods imports is low.