Colgate-Palmolive May Raise Prices Again As Input Costs Rise

Colgate-Palmolive India could push through fresh price increases over the next few quarters as it works to shield profit margins from a rise in raw material costs tied to the ongoing conflict in West Asia, The Times of India reported.

Speaking at the company's annual investor day, CEO and managing director Prabha Narasimhan said inflationary pressure continues to weigh on the business, even as the company tries to keep essential products affordable for lower-income buyers. She noted that extra product quantity added to smaller pack sizes last year, following the GST rate cut, has not been rolled back.

"We have ring-fenced the most vulnerable consumers," Narasimhan said, as quoted by TOI.

Smaller Packs Keep Extra Grammage

Narasimhan pointed to the company's ₹10 and ₹20 packs as examples where the added quantity has stayed in place, calling them strong value propositions for buyers. Price hikes so far have stayed modest, in the low single digits, over recent quarters. Going forward, the company intends to lean on packaging upgrades and a better overall product experience to keep its main brands competitive.

Growth in rural markets is being helped along by wider product reach, higher household incomes and increasing awareness around dental hygiene, the company said. It stopped short of addressing how this year's weaker monsoon might affect rural consumption going forward.

Narasimhan admitted the company was unhappy with how its personal care label Palmolive has performed. To give the brand a bigger push online and through direct-to-consumer channels, Colgate-Palmolive India has brought in Bombay Shaving Company to run these operations on its behalf.

Shares Slide On Investor Day

Colgate-Palmolive India stock dropped as much as 3% on Tuesday, August 18, after the company used its investor day to highlight premiumisation as a central growth lever, while indicating it would prioritise expansion over protecting margins in the near term.

Brokerage notes from the analyst meeting said management pointed to premiumisation and increased usage frequency as the two main growth levers going forward, with premiumisation taking precedence. The company also flagged that sales growth would likely outpace profit growth, as it plans to spend more on advertising and marketing to build its brands.