Colgate-Palmolive India posts surprise drop in Q3 profit on costs, dull demand

The Indian arm of the US consumer goods major's net profit slipped nearly 4% to Rs 243 crore for the quarter ended Dec. 31

Colgate-Palmolive (India) Ltd reported a surprise fall in third-quarter profit on Tuesday, as inflation-hit consumers tightened spending, while higher costs weighed.

The Indian arm of the US consumer goods major's net profit slipped nearly 4 per cent to Rs 243 crore for the quarter ended Dec. 31.

Analysts, on average, had expected profit to rise to Rs 266 crore, according to IBES data from Refinitiv.

The toothpaste maker's total expenses climbed 3 per cent to Rs 975 crore.

Packaged goods makers have globally raised prices of products from toothpaste to coffee as the Russia-Ukraine war and supply snarls led to an increase in the price of commodities, including palm oil, cocoa and crude oil.

The price hikes forced lower-income consumers and the rural population to tighten their budgets as they struggled to recover from the economic impact of Covid-19.

"Oral care consumption continued to be weighed down in the quarter by adverse macro factors," Colgate-Palmolive India Managing Director Prabha Narasimhan said in a statement.

Revenue from operations increased nearly 1 per cent to Rs 1,281 crore, with many analysts attributing it to price increases. The company's shares, which had climbed nearly 4 per cent last year, fell as much as 2 per cent to Rs 1,460.25 after the results were announced.