MOSL: COLGATE-PALMOLIVE INDIA (Buy)-Brushing up on some history
COLGATE-PALMOLIVE INDIA: Brushing up on some history
(CLGT IN, Mkt Cap USD5.9b, CMP INR1534, TP INR1815, 18% Upside, Buy)
Revisiting successful impact of management change in India listed consumer MNCs
** Colgate-Palmolive India (CLGT) saw a change at the managing director (MD) level from 1st Aug'19. We believe that this change is promising based on prior examples seen at listed consumer MNCs in India. CLGT's peers such as HUVR, NEST and PGHH had witnessed significant underperformance in the past, but were revitalized with the advent of a new MD/CEO.
** Historically, despite taking its eyes off the ball on several occasions, CLGT has managed to get back on track. CLGT faced challenges in the form of (a) HUVR launching gel-based toothpaste in the late-1980s, (b) competition from price warriors, such as Ajanta, Amar, etc. in the mid-2000s, and (c) Sensodyne launch by GSK in the premium-end of the market in the latter part of that decade. However, CLGT recovered ground and emerged as the dominant market leader.
** Its distribution muscle (CLGT has the best direct reach after HUVR in the personal care business), concentration of ad-spends and having the most extensive category development efforts in the FMCG space provides CLGT with considerable moats to regain growth momentum.
Colgate Palmolive (India) Limited is engaged in the personal care and oral care business. The Company offers various personal care products, such as soaps, cosmetics and toilet preparations. The Company's oral care category of products includes toothpastes, toothbrushes, toothpowder, whitening products and mouthwash. In the toothpaste category, the Company offers products, including Colgate Total Charcoal Deep Clean Toothpaste, Colgate Active Salt Neem Toothpaste and Colgate Sensitive Pro-Relief (CSPR) Enamel Repair Toothpaste. In the toothbrush category, the Company offers the Colgate 360 degree Toothbrush range, including 360 degree Charcoal Gold, 360 degree Whole Mouth Clean, 360 degree Visible White and 360 degree Floss-Tip, and Colgate ZigZag Black Toothbrush. In the Personal Care category, the Company offers Palmolive's Foaming Hand Wash range in approximately two variants.
Motilal Oswal Financial Services Ltd. is a reputed name in Financial Services and Online Trading with group companies providing services such as Private Wealth Management, Retail Broking and Distribution, Institutional Broking, Asset Management, Investment Banking, Private Equity, Commodity Broking, Currency Broking, Principal Strategies & Home Finance.
Motilal Oswal Securities is a group company of Motilal Oswal Financial Service Limited which started as a stock trading company and has blossomed into well diversified firm offering a range of financial products and services. Motilal Oswal has built a reputation as the source for best stock trading company and this has taken a wealth of experience, knowledge and expertise, constantly working in tandem, over the years.
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