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On Monday, UBS analyst Amit Sachdeva changed the stock rating of Colgate-Palmolive (NYSE:CL) India (CLGT:IN) from Sell to Buy, significantly raising the price target to INR 3,100.00 from the previous INR 2,240.00. The upgrade follows a notable decline in the company’s share price, which UBS now deems to present an attractive valuation for investors.
Sachdeva’s comments highlighted an improving outlook for Colgate-Palmolive India, pointing to several factors that underpin the positive rating. Despite current weak demand, the analyst anticipates a turning point in earnings growth. One of the primary reasons for the optimism is the company’s increasing market share and its strengthened position as an oral-care specialist, which is evident from a 6% volume growth in the third quarter of fiscal year 2025.
The report also suggests that the recent margin reset and subdued earnings are temporary. Colgate-Palmolive India’s focus on premium product volumes is expected to lead to a robust earnings recovery starting in the second quarter of fiscal year 2026. Additionally, the potential for Colgate to capitalize on quick commerce is seen as an opportunity for the company to outpace its competitors in terms of investment.
UBS projects that the earnings per share (EPS) for Colgate-Palmolive India will accelerate from a growth rate of 7% in FY25E to a compound annual growth rate (CAGR) of 10% over FY25-27E. This anticipated growth is cited as a potential catalyst for the stock. The revised price target and upgraded rating reflect UBS’s confidence in the company’s prospects for the coming years.
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