Mumbai: Colgate-Palmolive India Ltd recorded a 17.6% drop in net profit to Rs100.44 crore for the quarter ended June 30, missing analyst estimates.
A Mintpoll of four brokerages had estimated that the company could see net profit decline by up to 11% or record a growth of 9% in the best case scenario.
The company had posted a net profit of Rs 121.98 crore in the corresponding quarter of fiscal 2011.
Revenue growth at 15.55%, however, beat three out of four analysts’ expectations. The company recorded Rs611.10 crore sales for the June quarter against Rs 528.82 crore in the year-ago period.
For the maker of Colgate Total, new launches of Colgate Sensitive Pro-Relief, Colgate 360 Sensitive Pro-Relief Toothbrush, Colgate Plax Sensitive Mouthwash and Colgate Plax Complete Care Mouthwash aided volume growth but they also led to higher advertising expenses which affected profit.
Advertising and sales promotion expenses rose 42.34% year-on-year to Rs 98.79 crore.
“The company achieved a volume growth of 12% over the same quarter of the previous year led by a steady 14% growth in the toothpaste category,” the company said in a statement.
It increased prices across various product categories by 2-7% in May.
“The current quarter will witness part of consequent realization increase benefits,” said a 15 July report by analysts Krishnan Sambamoorthy and Diwakar Sekhar Y. of Fortune Group, which includes Fortune Equity Brokers (India) Ltd.
The brokerage had estimated a 7% decline in net profit, partly on account of a marginal increase in tax rates year-on-year.
During the June quarter, the company paid a first interim dividend of Rs108.8 crore (Rs8 per share).
Colgate-Palmolive shares rose 1.43% to close at Rs 992.50 on the Bombay Stock Exchange even as benchmark Sensex rose 1.55%.