Muted Q3 show leads analysts to retain 'Sell' on Colgate-Palmolive India

Brokerages Emkay Global, and ICICI Securities have maintained their Sell ratings on the stock, citing persistent volume pressure, structural challenges in the core oral care category

Market analysts continue to remain cautious on Colgate-Palmolive (India) after the FMCG major reported subdued growth in the third quarter of FY26 (Q3FY26). 

 

Analysts at Emkay Global, and ICICI Securities have both maintained their Sell ratings on the stock, citing persistent volume pressures, structural challenges in the core oral care category, and the absence of a sustained demand-led recovery. They also noted limited growth visibility, with earnings supported largely by mix, cost controls, and premiumisation rather than broad-based volume growth.

 

During Q3FY26, Colgate-Palmolive (India) reported net sales of ₹1,473 crore, up 1.4 per cent year-on-year (YoY) from ₹1,452 crore in Q3FY25. Net profit after tax stood at ₹324 crore, compared with ₹323 crore in the same quarter last fiscal year.

 

 

Amid this, the Colgate-Palmolive (India) shares were quoted trading lower by 0.28 per cent at ₹2,105.90 on the BSE at 09:24 AM on Friday, January 30.  CATCH STOCK MARKET UPDATES TODAY LIVE

ICICI Securities – Sell | Target Price ₹1,800

ICICI Securities retained its Sell rating on Colgate, assigning a DCF-based target price of ₹1,800 per share. Analysts noted that Colgate’s Q3FY26 performance underscores structural challenges, with stabilisation driven by cost and mix levers rather than a revival in core demand. While revenue returned to low-single-digit growth, volumes in mass oral care remain under pressure, with innovation and premiumisation supporting visibility more than throughput.

 

“The lack of scalable growth engines beyond core oral care, with no clear signs of penetration-led recovery, keeps earnings quality fragile despite benign input costs and disciplined spends. With growth still reliant on mix rather than volumes and no clear demand catalysts emerging post-GST normalisation, medium-term growth visibility remains constrained. Despite some valuation normalisation, the absence of volume-led recovery leaves risk-reward unfavourable,” wrote Manoj Menon, Dhiraj Mistry, Ashutosh Joytiraditya, and Akshay Krishnan of ICICI Securities in a research note.

 

The brokerage has trimmed its earnings estimates by 2–3 per cent for FY26–28, modelling revenue/Ebitda/PAT CAGRs of 5 per cent/4 per cent/4 per cent over FY25–28E. Key upside risks include lower competitive intensity and higher-than-expected market share gains.  ALSO READ | ITC posts flat Q3 profit; brokerages cautious on cigarette tax, margin woes

Emkay Global – Sell | Target Price ₹2,000

Emkay Global also retained its Sell rating on Colgate, with a Dec-26E target price of ₹2,000, based on a 35x P/E (~20 per cent discount to the last five-year average forward P/E). The brokerage cited ongoing category and competitive pressures. Emkay noted that the GST rate cut has been passed on to consumers, which is expected to help arrest volume pressure in the near term and drive medium-term growth.

 

The firm highlighted that Colgate’s focus on premium offerings has resulted in better growth in e-commerce, with quick commerce contributing ~50 per cent of this segment. Colgate’s Q3FY26 results were muted, with 2 per cent revenue growth and a 3 per cent Ebitda decline, affected by an inverted duty structure.

 

“Our concerns about a single-category company with elevated margin levels continue, with Colgate India dealing with competitive stress and macro hiccups in its topline performance. The GST cut, though, is likely to help demand with affordability; however, we see the benefit to be limited for Colgate, as premiumisation and a ‘twice brushing’ habit will call for high media spending and innovations ahead (most launches in place),” Emkay said in its report.

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