Colgate Q2 Results Miss Estimates: Analysts See Potential Recovery If This Support Holds
Synopsis
- Q2 net profit fell 17.1% YoY to ₹327.5 crore on weak demand and GST-related disruptions.
- The stock is trading near a critical multi-decade support level.
- Analysts remain cautious, flag ₹2,152-₹2,400 as a critical zone for the stock.
Shares of Colgate-Palmolive (India) fell 3.8% to ₹2,200 on Friday, after the FMCG giant posted weak Q2 results.
Net Profit Declines 17.1%
The company’s net profit declined 17.1% year-on-year (YoY) to ₹327.5 crore from ₹395.1 crore. Adjusted for a one-time tax refund impact in the base period, profit was down 7.2%. Revenue for the quarter slipped 6.2% to ₹1,519.5 crore compared to ₹1,619 crore a year ago.
EBITDA declined 6.6% to ₹464.5 crore from ₹497.4 crore, with operating margins largely stable at 30.6%. The board also declared a dividend of ₹24 per share.
Sequentially, net sales improved 6.1% from the June quarter, indicating early signs of recovery in demand.
“While we continued to navigate through a difficult operating environment, our second-quarter performance also reflects the transitory disruption at distributors and retailers across channels caused by the GST rate revision. Our first half performance cycles a high base of double-digit net sales growth in the base period and we expect a gradual recovery in performance in the second half,” said MD and CEO, Prabha Narasimhan.
Technical Analysis
Colgate’s stock is currently trading near a multi-decade support level at the 200-week moving average. If the stock holds this support and consolidates, there is potential for a trend reversal toward ₹2,500, said SEBI-registered analyst Front Wave Research.
The stock remains in a downtrend, consolidating within the ₹2,152-₹2,400 range. A break below ₹2,152 could trigger a fall toward ₹2,050 - ₹2,100, but stronger volume is needed to confirm the move, added SEBI-registered Financial Sarthis.
What Is The Retail Sentiment?
Despite the intraday declines, retail sentiment on Stocktwits shifted to ‘neutral’ from ‘bearish’ a day earlier.
YTD, the stock has fallen over 17%.
Stay updated with all the latest Business News, including market trends, Share Market News, stock updates, taxation, IPOs, banking, finance, real estate, savings, and investments. Track daily Gold Price changes, updates on DA Hike, and the latest developments on the 8th Pay Commission. Get in-depth analysis, expert opinions, and real-time updates to make informed financial decisions. Download the Asianet News Official App from the Android Play Store and iPhone App Store to stay ahead in business.