Colgate’s Premium Smile Shines in Urban Lanes, Margins Hold Their Sparkle

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Colgate-Palmolive (India), a leader in oral care, faced a challenging fourth quarter for FY25, with net profit and sales dipping due to subdued urban demand and increased competition. Despite these headwinds, the company’s premium products are gaining ground with affluent urban consumers, and EBITDA margins remain resilient in the low 30% range.

Financial Performance

Net profit for Q4FY25 stood at ₹355 crore, down 6% sequentially from ₹380 crore in the same quarter last year.
Quarterly net sales of ₹1,452 crore fell 1.9% from the previous year
EBITDA was at 34% for the quarter, which is slightly down from 35.7% a year ago but is comfortably within the targeted low 30s.
For the full year FY25, net profit after tax rose 8.5% to ₹1,437 crore, and net sales grew 6.3% to ₹5,999 crore.

Market and Portfolio Insights

The premium product portfolio is seeing strong traction among top-tier urban customers, helping to offset some of the broader urban demand softness.
The company relaunched its flagship Colgate Strong Teeth Toothpaste with enhanced technology and introduced Colgate Total Plaque Release toothpaste, targeting health-conscious consumers.
In the face of a tough macro environment and heightened competition, the toothbrush portfolio of the company registered strong growth.

Margin and Cost Management

Contracting EBITDA margin was due to increased employee costs, rising advertising expenditure, and other costs as a proportion of sales.
The company is still implementing its "Funding The Growth" program, re-investing in business projects to preserve a healthy margin profile.

Strategic Initiatives and Outlook

Colgate-Palmolive (India) launched OHM, the company's first pan-India Oral Health Movement, that accessed 4.5 million people across the country using AI-driven digital screening.
The company continues to focus on its strategic priorities and expects a gradual recovery in market conditions in the latter half of the year while faced with ongoing macro headwinds.

The board declared a second interim dividend of ₹27 per share. On this basis, the total FY25 dividend stands at ₹51 per share.

Relevant Sources: Free Press Journal, Indian Retailer, CNBC TV18, Colgate-Palmolive (India) Investor Relations, Economic Times