Colgate Palmolive (India) Limited — Q4 FY24
Colgate delivered a strong Q4 with 10.7% domestic revenue growth and record EBITDA margins of 35.9%, expanding 250 bps YoY.
bullish
high
Financial stats pending filing verification
Claim Ledger
Did management answer the analysts?
Every material analyst question, graded on whether management actually answered it — with the verbatim exchange and quantitative claims checked against filed numbers.
45%Questions answered4Evaded / deflected10Questions audited
Partial answer
High priority
Personal care strategy: Protex/Sanex timeline, Palmolive channel focus, disruption, growth rate.
Asked by Abneesh Roy, Nuvama
Management addressed channel strategy but declined to give timeline for Protex/Sanex and did not provide Palmolive growth rate.
no timeline givenno growth rate disclosed
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Question
My first question is on personal care. So slide number 19 mentions Protex and Sanex. So is that an indication that these two brands have been kind of shortlisted and if any time frame? And second related question on personal care is on Palmolive... Are you focusing essentially on modern trade and e-commerce for Palmolive? ...the category seeing huge disruption... focusing on premium, does it make sense? ...Would Palmolive have grown at least 2x, 3x of that in FY 2024?
Prabha Narasimhan, Managing Director
On the Palmolive brand, our focus is not only modern trade... we will use to make sure that Palmolive is available in the right type of stores in general trade. ...we're committed to building Palmolive across all the relevant channels... On Protex and Sanex, it's not an indication of us doing Protex and/or Sanex. But I can only say that, watch this space...
Evasive
Medium priority
Palmolive advertising spend: share of voice target and upfront investment.
Asked by Abneesh Roy, Nuvama
Management avoided giving a numeric benchmark and instead described the broader media mix.
no specific share of voice target givenreframed to reach
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Question
Would you have a benchmark in terms of what kind of share of mind, share of voice, etc., you would like to target? Because this is an underinvested brand for almost two to three decades. So upfront advertising will be needed.
Prabha Narasimhan, Managing Director
So I think the way we measure these kind of campaigns is really what is the reach that we wish to deliver... What you see as the mass media advertising is the tip of the iceberg... A lot of it is actually going behind influencer marketing, behind digital campaigns, and in-store...
Evasive
High priority
Breakdown of full-year growth into volume, mix, and pricing; outlook for next year.
Asked by Amit Sachdeva, HSBC
Management refused to provide the requested breakdown and gave only qualitative outlook.
declined to break down growth componentsno specific guidance
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Question
Could you help us understand in the double-digit, nearly double-digit full-year growth, what has been the volume mix and pricing element? And as we go into the next year, right, how do you see these elements shaping up?
Prabha Narasimhan, Managing Director
We tend not to break up the number. ...we'd look at roughly a balanced growth between all of them. ...price is always an outcome of what is the value that you're delivering... I think actually all of the vectors are ability to take pricing, ability to expand the market, and ability to drive premiumization.
Answered
Medium priority
Potential for prestige pricing in oral care beyond premium.
Asked by Amit Sachdeva, HSBC
Management acknowledged the opportunity and provided context on where the bulk of premiumization lies.
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Question
Oral care has not yet the prestige part of it. ...Do you think about developing that market as well, or it's too early for India to sort of get into that zone then?
Prabha Narasimhan, Managing Director
If we were to say 400-500 index would be even that would be considered as prestige in the toothpaste category, yes, there is most certainly an opportunity in this country. ...But the large bulk of premiumization will continue to come from the 50%-100% premium kind of range...
Partial answer
High priority
Request to disclose volume growth or UVG; question on Colgate Total size and salience.
Asked by Jay Doshi, Kotak Securities
Management refused the disclosure request and gave historical context but not current size.
declined to disclose volume growthno current salience number given
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Question
The request is if you could introduce either volume growth or UVG in your quarterly disclosures... And secondly, my question is on Colgate Total. ...could you elaborate a little bit on it in terms of what was the size of the brand or what was its salience in overall Colgate sales earlier? What is it right now?
Prabha Narasimhan, Managing Director
Firstly, on your request, let me just take it back, and we'll come back to you. But at the moment, we tend not to provide that. On Colgate Total, this brand has existed in the country for quite a while. About a decade ago, it actually used to be a double-digit share player in modern trade...
Evasive
Medium priority
Follow-up on Colgate Total current salience at end of FY24.
Asked by Jay Doshi, Kotak Securities
Management did not provide a numeric salience figure, only qualitative description.
no specific salience percentage givenvague 'sizable player'
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Question
Where is Total today in terms of salience at the end of FY 2024?
M.S. Jacob, Whole-Time Director and CFO
Prabha mentioned we were double-digit in modern trade when we were big on Total a few years back. But since then, modern trade is low single-digit. But e-com has been a big story. ...Total is a sizable player already.
Evasive
High priority
Breakdown of Q4 and FY24 sales growth into volume, mix, price; outlook.
Asked by Percy Panthaki, IIFL
Management refused to provide the requested breakdown and gave only qualitative forward view.
declined to provide breakdownno specific outlook
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Question
Can you please break up your sales growth for Q4 into volume, mix, and price? Same for FY24 full year. Also, given that pricing will anniversary soon, how should we look at your sales growth over the next few quarters?
M.S. Jacob, Whole-Time Director and CFO
Prabha mentioned on the volume piece, we are not splitting volume and pricing. And so we won't comment on that as of now. Going forward, you're right. As inflation moderates, pricing will be an important discussion. But we do expect the category growth...
Answered
High priority
Potential for further margin expansion from cost savings; gross margin ceiling.
Asked by Mihir Shah, Nomura
Management gave a clear range for gross savings and stated margins will not expand at the same rate.
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Question
How much more juice do you think we have that we can take out from the cost side, which can keep taking these margin profiles higher? ...where can it really settle down only from the cost-saving side?
Prabha Narasimhan, Managing Director
I don't think it is our effort to massively expand margins as we go forward. ...this ability to generate around 4%-5% of net sales as gross saving is something that I think we can continue... Our effort will be to make sure that we are judiciously using the sources of funds...
Partial answer
High priority
Clarification on whether 9.5% growth is sustainable; mix improvement quantification.
Asked by Mihir Shah, Nomura
Management corrected the growth assumption but provided a qualitative premium growth target instead of mix quantification.
denied giving guidanceno mix percentage given
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Question
You mentioned that 9.5% growth rate is a sustainable growth rate that we should assume on overall basis. Is that a correct understanding? ...maybe you can give some sense on the mix that we are seeing. Is there a mix improvement? ...Would it be low single digits?
Prabha Narasimhan, Managing Director
I don't recall mentioning that. I'm certainly not giving guidance on the number. ...our target would be to be at least 2.5-3 times faster with our premium portfolio than our base portfolio. And at this time, we're exceeding that target.
Answered
High priority
Rural improvement: base effect or real consumption; impact on premiumization.
Asked by Vishal Punmiya, YES Securities
Management provided a specific rural-urban growth differential and clearly stated premiumization is independent.
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Question
Is it just because of base effect, or is there any major improvement that you are seeing in consumption for your category? And with this improvement, with rural picking up, do we expect the premiumization-led growth to be slightly slower in FY25 versus FY24 while volume growth improves for you?
Prabha Narasimhan, Managing Director
What we are seeing in this quarter is rural is outpacing urban growth by close to 200 basis points... the macro indicators... suggests to us that this is something that is sustainable... On your second piece on will the rural growth preclude the premiumization growth, I don't think so because these are actually quite independent.