Colgate Palmolive Equity Research Report – Part I


Today is Dhanteras and Goddess Lakshmi is worshipped to provide prosperity and well being.

On this auspicious day, I would like to start a new segment—researching companies for knowledge purpose.

I would like to start this segment with a well known company—Colgate Palmolive (India) Ltd.

I am going to divide this equity research report in several parts so that you and I can digest it :)

In this part, we are going to see more about the company Colgate Palmolive and its business model.


About Colgate Palmolive

Colgate Palmolive is a FMCG company mainly focused on Oral Care, Personal Care, Household Care and Dentist Products categories.

In simple terms, Oral Care involves toothpastes, toothbrushes, tooth powder and mouthwash. Personal Care involves products like shower gels, liquid hard wash, shave preps, skin care and hair care. Dentist products category includes sensitivity treatment, tooth whitening, mouth ulcer treatment etc.


Colgate Palmolive
Colgate Palmolive


The company is No.1 in toothpaste, toothbrush and tooth powder category.  The company is market leader in oral care.

Over the past 10 years, Colgate has grown its net sales and profits at an average annual rate of 9% and 20% respectively.

The company has also maintained a debt-free balance sheet and excellent free cash flows.


Colgate Palmolive Business Model

The company’s main revenue (90%+) comes from its oral care products—toothpastes, toothpowder, toothbrush—which is a part of personal care products.

As mentioned in the above figure, the company’s 5-10% revenue comes from other products like personal care and home/dentist products.

The company’s main cost drivers are – chemicals, tubes and containers, oils and cartons.

Company is market leader in toothpaste, tooth powder and toothbrush category.


Colgate Palmolive
Colgate Palmolive


The company has acquired land in Gujarat Industrial Development Corporation on long-term lease for setting up a new Toothpaste manufacturing facility. In addition to this, the company also acquired land in Andhra Pradesh on lease for setting up a new Toothbrush manufacturing facility. Both these projects are expected to be operational in the year 2013.

This is the first part of equity research report on Colgate Palmolive. I will write on company’s business performance in my next post.

Wish you a very happy Diwali. May God give you all the happiness and success and may you prosper like gold. :)

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