Colgate Palmolive (India) Ltd. Q4 FY22 Earnings Conference Call Insights

Key highlights from Colgate Palmolive (India) Ltd. (COLPAL) Q4 FY22 Earnings Concall

Management Update:

• COLPAL said its penetration as Colgate at 88% is the most penetrated brand in India.

Q&A Highlights:

• Percy Panthaki from IIFL asked that Naturals as a category has gained market share over the years over plain white toothpaste and if COLPAL is expecting this category to grow. Arvind Chintamani VP replied that Naturals segment has declined a little bit. It’s a flattening and a seeing a slight reduction in demand.

• Amnish Aggarwal from Prabhudas Lilladher asked about the demand trend and the outlook for next two quarters. Arvind Chintamani VP said that across categories, there is a definite impact of the inflationary environment that COLPAL has seen more in rural than in urban. COLPAL does expect this to come back and in 2H23 see demand strengthen for its category.

• Akshen Thakkar from Fidelity Investments asked if COLPAL is comfortable with level of gross margins. M.S. Jacob CFO replied that gross margin is a result rather than a target of doing all right things. COLPAL is not working on a target level of gross margin. It’s to do right things that will help grow topline and margin will be what it is.

• Akshen Thakkar from Fidelity Investments asked to quantify current market share of COLPAL. Arvind Chintamani VP replied that at a overall category level, COLPAL is holding shares at levels it’s seen in the previous quarters.

• Devchandra Ramani from Clovek Wealth enquired about the penetration of oral care products; tooth paste the tooth brush at an industry level. Arvind Chintamani VP said that on penetration, at an annual level, there has been no change. It’s hard to gauge penetration at a quarter level.

• Devchandra Ramani from Clovek Wealth also asked about the drivers for top-line growth in medium to longer term. Arvind Chintamani VP answered that COLPAL is seeing growth coming at different ends of the price benefit spectrum. The company will focus aggressively on the low unit packs, the INR10 and INR20 and brands like Cibaca in areas where outlay sensitivities are very high.

• Siddharth Bhattacharya from Anvil Wealth asked about COLPAL’s view on changing oral habits in India, urban and rural, especially twice a day brushing. Arvind Chintamani VP said that COLPAL continues to drive its Bright Smiles Bright Futures program and continue to communicate the importance of night brushing. So education continues to happen on this front.