Q3-2015: Colgate Palmolive’s q-o-q marketing spends down 11.3 per cent

BENGALURU: Last quarter (Q2-2015), Colgate-Palmolive (India) Limited (Colgate-Palmolive) spent the highest amount towards advertisement and sales promotion (ASP) in a quarter at Rs 201 crore (20.1 per cent of Total Income or TI) based on the data covering the last 11 quarters starting Q1-2013 until Q3-2015.

In the current quarter (Q3-2015), the company lowered its ASP by 11.3 per cent to Rs 178.21 crore (17.9 per cent of TI), a figure that was 33.7 per cent more than the Rs 121.46 crore (13.4 per cent of TI) in the corresponding quarter of the previous year. Q2-2015 ASP was also the highest in terms of percentage of TI.

Note: 100,00,000 = 100 Lakhs = 10 million = 1 crore

YTD, Colgate-Palmolive’s ASP was Rs 559.76 crore (19 per cent of TI), 63.5 per cent more than the Rs 342.32 crore (12.7 per cent of TI) in 9M-2014.

Colgate-Palmolive’s brands include Colgate for oral care, Palmolive, Charmis and Halo for personal care, and Axion for household care.

During the period under consideration, Colgate-Palmolive’s ASP was lowest in Q4-2013, both in terms of absolute rupees and ASP as percentage of TI at Rs 82.10 crore and 9.7 per cent of TI. Fig A below indicates an upward linear trend for ASP, both in absolute rupees and percentage of TI.

Though the company’s TI in the current quarter was almost flat (down 0.5 per cent) at Rs 995.99 crore as compared to the Rs 1000.52 crore in the immediate trailing quarter, it was 9.8 per cent higher than the Rs 907.35 crore in Q3-2014. Colgate-Palmolive’s TI shows an increasing linear trend during the period under consideration. Historically, in Q3-2013 as well as Q3-2014, Colgate-Palmolive’s TI has shown a slight dip with respect to Q2 of the corresponding years.

Across seven financial years starting FY-2008 until FY-2014, the company’s TI, ASP and ASP as percentage of TI show an upward linear trend, with the company’s marketing spends being the highest both in terms of absolute rupees and percentage of TI in FY-2014 at Rs 688.66 crore (19.2 per cent of TIO).

Fig A1 above indicates the breakup of Colgate-Palmolive’s advertising and sales promotion across three financial years for which data is available. In Q3-2013 and Q3-2014, ASP was higher than Q2-2013 and Q2-2014 respectively, however, as mentioned above, Q3-2015 ASP is lower than Q2-2015.


Across four consecutive quarters starting Q4-2014 until the current quarter, Colgate-Palmolive’s PAT has remained almost flat at about Rs 130 crore with small variations. The company’s PAT in Q3-2015 at Rs 130.86 crore (13.2 per cent of TI) was one per cent more than the Rs 129.58 crore (13 per cent of TI) in Q2-2015, but was 16 per cent more than the Rs 112.83 crore (12.7 per cent of TI) in Q3-2014.

Colgate-Palmolive’s PAT has been the highest at Rs 185.22 crore (21.5 per cent of TI) in Q1-2014 during the eleven quarter period under consideration, while the lowest PAT has been in Q3-2013 at Rs 111.05 crore (14.2 per cent of TI). PAT shows a flat to a slightly reducing linear trend in absolute rupees and a steeper linear slide in terms of percentage of TI. The company’s PAT in FY-2014 was Rs 539.87 crore, and unless the company’s results for Q4-2015 show a marked upsurge in absolute rupees, PAT in FY-2015 could be just about equal to or lower than PAT in FY-2014.

In its earnings release, Colgate-Palmolive states that the market share of its toothpaste category has increased by 80 basis points to 56.7 per cent during calendar year 2014 with contribution from its flagship brands Colgate Dental Cream, Active Salt, Max Fresh, Colgate Total and Visible White.

Colgate-Palmolive says that its market share in the toothbrush category also increased by 80 basis points to 42.4 per cent during calendar year 2014.

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