Shares of Colgate-Palmolive (India) were up on Tuesday after the fast-moving consumer goods major’s first-quarter profit growth beat analyst expectations, leading to bullish calls from brokerages.

What Happened: Colgate clocked a 33% jump in net profit to ₹364 crore for the quarter ending June 30, compared with a net profit of ₹273.7 crore post a year ago — ahead of street expectations of ₹332 crore for the quarter.

The company’s revenue from operations grew by 13.1% to ₹1,496.7 crore, compared with ₹1,323.7 crore in the year-ago period, also beating estimates of ₹1,430 crore.

At the operating level, EBITDA rose 21.5% to ₹508.3 crore in the first quarter from ₹418.1 crore a year ago, beating estimates of ₹470 crore for the quarter. The firm’s EBITDA margin stood at 34% in the reporting quarter, compared with 31.6% in the same period last year and slightly ahead of analyst estimates of 33%.

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The quarter saw continued demand growth in rural markets outpacing urban markets for the second consecutive quarter. Driven by this and the strong performance of toothpaste, toothbrush and personal care products, domestic revenues grew by 12.8% for the quarter.

Analyst Reactions: Investc maintained a “hold” rating on the stock but hiked its target price to ₹3,108 from ₹2,640, calling the results a blowout quarter as revenue grew at the quickest click in a decade, driven by higher volumes.

The brokerage said internal initiatives on product superiority, focus on its strengths as well as a favourable rural macro were key drivers of growth for Colgate. However, it advised some caution as the stock trades at all-time-high valuations.

Motilal Oswal also said that the FMCG major’s June quarter results were significantly ahead of its estimates, marking the second quarter of positive volume-led growth after eight consecutive quarters of sub-par performance. The analysts raised their EPS estimates for FY25 and FY26 by 6-7% on the back of improving volume performance, aggressive pricing strategy, and consistent operating margin expansion. Motilal Oswal has a “neutral” rating on the stock with a price target of ₹3,150.

Meanwhile, Jefferies upgraded its FY25-27 earnings per share estimates for Colgate by about 6%, marking the third straight quarter of upgrades “buy” and hiked its price target to ₹3,570 from ₹3,020 earlier. It noted the impressive growth in revenue, with hypermarkets, supermarkets and discount stores (HSD) showing volume growth in the quarter.

Price Action: Colgate India’s share price climbed 6.02% to ₹3,403.40 in the early hours of trade on Tuesday. The stock has gained nearly 37% so far this year.

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