Colgate net creeps up by 1.2% on marginal sales rise

Net profit margins dropped marginally to 8.45 per cent from 8.72 per cent last year. Operating profit margins also dropped to 14.10 per cent from 16.14 per cent last year. Operating profit suffered a drop of 8.7 per cent to Rs 133.32 crore from Rs 146.05 crore last year. The fall in operating profit can be attributed to an increased expenditure on advertising and marketing, said analysts. The company has had to shell out more on this front in the face of competition from rival Hindustan Lever Ltd which has garnered a market share of 33 per cent intoothpastes. Dental care contributes 85 to 90 per cent to the sales of Colgate-Palmolive. It is a market leader in the dental care market.

The company’s performance in the first half of 1997-98, was better than that in the second half of the fiscal. Net sales in the second half dropped to Rs 436.81 crore from Rs 446.20 crore in the same period last year. Net profit during the period increased marginally to Rs 36.15 crore from Rs 35.66 crore in the same period last year.

Operating profit in the second half dropped to Rs 53.55 crore as against Rs 79.77 crore in the first half of the fiscal. Interest charges were higher at Rs 8 lakh in the second half as against Rs 2 lakh during the same period last year. The company declared a lower provision for taxation of Rs 19.60 crore in the second half as compared to Rs 29.46 crore in the same period last year. Depreciation in the second half was Rs 10.43 crore.