Colgate India: missed opportunities - Views on News from Equitymaster

Helping You Build Wealth With Honest Research
Since 1996. Try Now

  • MyStocks

MEMBER'S LOGINX

     
Login Failure
   
     
   
     
 
 
 
(Please do not use this option on a public machine)
 
     
 
 
 
  Sign Up | Forgot Password?  

Colgate India: missed opportunities

Apr 14, 2000

While most global FMCG companies are looking at India as a major market for the future and their Indian subsidiaries form a healthy percentage of their global ambitions, why is Colgate, which entered India as early as 1937 still a laggard. Consider this:

  • Colgate Palmolive India contributes only 2.5% to the turnover of its parent Colgate Palmolive Company.
  • In terms of net profits, it forms a miniscule 1% of the parent's total profit worldwide.
  • Colgate India's total assets = 1.7% of Colgate Palmolive worldwide.

(Rs m) Colgate worldwide
Dec 31, 1999
Colgate India
Mar 31, 1999
Colgate India
as a % of parent
Net sales 397,918 9,982 2.5%
Cost of sales 184,335 9,043 4.9%
Gross profit 213,583 939 0.4%
Net profit 40,903 412 1.0%
Total Assets 323,944 5,573 1.7%
Gross proft margin 54% 9%  
Net profit margin 10% 4%  

Why is that?
Today its contemporary Hindustan Lever, which entered India almost during the same period as Colgate, contributes a respectable 6% to Unilever's turnover and around 8.5% to its overall profit. So why did Colgate India lag behind?

For detailed analysis click HLL: Unilever's pride

The difference lies in their approach to the Indian markets. While, Unilever reposed faith in India early on and introduced a slew of products from its global product portfolio, Colgate chose to focus solely on the oral care part of its business and refrained from entering other product areas such as personal care and home cleaning segments early on.

By the time it realised the folly of being a predominantly one-product company it was too late. When it did try to introduce its 'Optima' range of shampoos in the hair care segment and compete with HLL, the latter turned the tables on it by attacking Colgate's oral care turf. Severe competition from HLL and other players led to the company consistently losing market share from 65% in FY95 to current levels of 60%, and it finally withdrew Optima to concentrate on saving its oral care market share.

Equitymaster requests your view! Post a comment on "Colgate India: missed opportunities". Click here!

  

More Views on News

COLGATE Announces Quarterly Results (3QFY21); Net Profit Up 24.7% (Quarterly Result Update)

Jan 29, 2021 | Updated on Jan 29, 2021

For the quarter ended December 2020, COLGATE has posted a net profit of Rs 2 bn (up 24.7% YoY). Sales on the other hand came in at Rs 12 bn (up 7.4% YoY). Read on for a complete analysis of COLGATE's quarterly results.

COLGATE Announces Quarterly Results (2QFY21); Net Profit Up 12.3% (Quarterly Result Update)

Oct 22, 2020 | Updated on Oct 22, 2020

For the quarter ended September 2020, COLGATE has posted a net profit of Rs 3 bn (up 12.3% YoY). Sales on the other hand came in at Rs 13 bn (up 6.0% YoY). Read on for a complete analysis of COLGATE's quarterly results.

COLGATE 2018-19 Annual Report Analysis (Annual Result Update)

Sep 30, 2019 | Updated on Sep 30, 2019

Here's an analysis of the annual report of COLGATE for 2018-19. It includes a full income statement, balance sheet and cash flow analysis of COLGATE. Also includes updates on the valuation of COLGATE.

More Views on News

Most Popular

India: Recovery Stalled by Vaccine Games? (The Honest Truth)

Apr 13, 2021

Ajit Dayal on how India's vaccine strategy will impact the markets.

4 Stocks to Make Your Portfolio Immune to the Second Covid Wave (Profit Hunter)

Apr 6, 2021

Rather than predicting the market, successful investing is more about preparing well and placing your bets accordingly.

A Stock with 700% Return Potential Comes with Additional Payoffs (Profit Hunter)

Apr 15, 2021

Narayana Murthy was one of the first unicorn founders to get the backing of this entity...

Why Did the Market Crash on Monday? (Fast Profits Daily)

Apr 13, 2021

In this video, I'll you what I think is the real reason behind yesterday's market crash.

A Unique Sector for Short-Term Profits (Fast Profits Daily)

Apr 12, 2021

This ignored sector could deliver big short-term profits.

More

India's #1 Trader
Reveals His Secrets

Secret To Increasing Your Trading Profits Today
Get this Special Report,
The Secret to Increasing Your Trading Profits Today, Now!
We will never sell or rent your email id.
Please read our Terms

COLGATE SHARE PRICE


Apr 16, 2021 (Close)

TRACK COLGATE

  • Track your investment in COLGATE with Equitymaster's Portfolio Tracker. Set live price alerts, get research alerts and more. Get access now...
  • Add To MyStocks

COMPARE COLGATE WITH

MARKET STATS