Colgate India margin falls as costs outpace sales for a second quarter
Standalone operating margin fell 2.87 percentage points YoY, while net profit growth was limited to +4.29% despite +12.26% revenue growth.
Filed 22 Oct 2026, 17:42 IST · after market close · Colgate-Palmolive (India) Ltd (COLPAL)
Key takeaways
- Expenses grew +16.91% YoY against revenue growth of +12.26%, cutting operating margin by 2.87 percentage points to 27.76%.
- Net profit rose +4.29% YoY to Rs 341.57 cr, helped by a 0.17 percentage-point easing in the tax rate and other income contributing 4.72% of pre-tax profit.
- The stock fell -4.75% after the filing, versus a 2.08% median absolute move after its last eight results.
Price around the results
Cost growth erased the operating leverage
On a standalone basis, revenue grew +12.26% YoY, but expenses rose +16.91%, leaving operating profit up only +1.73%; operating margin therefore narrowed by 2.87 percentage points to 27.76%. Sequentially, revenue increased +6.39% while expenses rose +10.00%, driving a 2.36 percentage-point margin decline and a -1.96% fall in operating profit.
Margin direction weakened after Q4FY26
Operating margin fell from 31.94% in Q4FY26 to 30.12% in Q1FY27 and 27.76% in Q2FY27, marking a second consecutive quarterly decline. Despite the compression, Colgate's margin was 11.58 percentage points above the 16.18% median for the nine Fast Moving Consumer Goods peers that had reported.
Reported profit received limited non-operating support
Other income contributed 4.72% of pre-tax profit, providing a modest non-operating contribution to reported earnings. The YoY tax-rate reduction of 0.17 percentage points helped net profit grow +4.29%, slightly ahead of the +4.06% increase in pre-tax profit; sequentially, the tax rate was almost unchanged, with a 0.01 percentage-point increase.
The market reaction was unusually negative for this stock
The stock fell -4.75% on 23 October after the results, underperforming the market by -4.36 percentage points, while trading volume reached 5.19 times its reference level. The decline was larger than the stock's 2.08% median absolute move after its last eight results; five of those reactions were negative and three were positive.
Q2FY27 at a glance
Standalone figures as filed with NSE — cross-checked against an independent source.
| Line item | Q2FY27 | Q1FY27 | QoQ | YoY |
|---|---|---|---|---|
| Revenue | ₹1,706 cr | ₹1,603 cr | +6.39% | +12.26% |
| Other income | ₹22 cr | ₹19 cr | +11.56% | +44.44% |
| Expenses | ₹1,232 cr | ₹1,120 cr | +10.00% | +16.91% |
| Operating profit | ₹473 cr | ₹483 cr | -1.96% | +1.73% |
| Operating margin (%) | 27.76% | 30.12% | — | — |
| Interest | ₹1 cr | ₹1 cr | -21.36% | -18.18% |
| Depreciation | ₹34 cr | ₹39 cr | -12.88% | -8.15% |
| Profit before tax | ₹460 cr | ₹462 cr | -0.43% | +4.06% |
| Tax | ₹119 cr | ₹119 cr | -0.39% | +3.38% |
| Net profit | ₹342 cr | ₹343 cr | -0.44% | +4.29% |
| EPS (₹) | ₹12.56 | ₹12.61 | -0.40% | +4.32% |
Operating margin of 27.76% compares with a Fast Moving Consumer Goods sector median of 16.18% across 9 peers that have reported Q2FY27.
How the stock reacted
| Window | Stock | vs NIFTY |
|---|---|---|
| Results day | -4.75% | -4.36% |
Volume on the results session was 5.19× its 20-day average.
What to watch
- Whether operating margin stabilises above 27.76% after its 2.36 percentage-point QoQ decline.
- Whether expense growth moderates from +16.91% YoY against revenue growth of +12.26%.
- Whether net profit growth continues to track close to pre-tax profit growth after +4.29% versus +4.06% YoY.