Shares of Colgate-Palmolive (India) fell more than 3 percent on Tuesday, August 18, as brokerages turned cautious on the near-term earnings outlook after the company’s Q1 analyst call. Analysts raised concerns that the higher spending required to drive growth and premiumisation may weigh on profitability.

Colgate Palmolive India stock was trading at Rs 1,904 in morning deals, down 3.1 percent and among the top midcap losers. Colgate-Palmolive India shares have declined 8.7 percent so far in 2026, compared with a 7.3 percent fall in the Nifty 50. The company has a market capitalisation of more than Rs 52,000 crore.

Analysts broadly expect revenue growth to be supported by volumes, pricing and a push towards premium products. However, Citi, CLSA and HSBC remain cautious as higher advertising and brand investments could keep earnings growth below revenue growth and limit margin expansion. Jefferies is the notable bull, seeing more than 30 percent potential upside as it expects the growth investments to translate into faster revenue growth.

Citi maintained its Sell call on Colgate Palmolive India stock with a target price of Rs 2,000 per share, implying less than 2 percent upside from Monday's close. The brokerage expects growth to be balanced across volumes, pricing and mix. It said that the premium segment is growing around six times faster than the overall category.

However, Citi expects higher brand investments to keep earnings growth below revenue growth, highlighting a trade-off between accelerating growth and protecting margins.

CLSA retained its Hold rating with a target price of Rs 2,024. It expects Colgate's high gross margin to sustain and provide room for greater advertising expenditure. Around 60 percent of the company's advertising spending is digital, which the brokerage said is helping drive faster growth in premium products.

CLSA raised its growth and gross-margin assumptions but cut its FY27 and FY28 earnings-per-share estimates to account for higher advertising expenditure. It said elevated spending may need to be sustained as easier market access intensifies competition.

HSBC also maintained a Hold call, with a target price of Rs 2,140. The brokerage sees premiumisation and higher usage frequency as important growth drivers and described the company's premiumisation push as encouraging. However, it expects revenue growth to outpace profitability because of increased marketing expenditure and said the broader growth outlook remains similar.

Jefferies struck a more bullish note, retaining its Buy rating and target price of Rs 2,650, implying more than 32 percent upside from Monday's close. The brokerage said premiumisation remains a key focus across Colgate's portfolio and distribution channels, with the company stepping up investments to support the strategy. Jefferies expects revenue growth to accelerate on the back of volumes, premiumisation and pricing, although margins are likely to remain range-bound as management prioritises growth.

Mayank Jain, Market Analyst at Share.Market by PhonePe, said Colgate-Palmolive India’s Q1 performance reflected healthy revenue growth, supported by high-single-digit toothpaste volume growth and strong traction in premium products, but profitability came under pressure as advertising and sales promotion expenses surged nearly 34 percent year-on-year and raw material costs rose more than 25 percent.

The brokerage commentary followed Colgate-Palmolive India's analyst call on Monday after its Q1 FY27 results. The company had reported a 7 percent year-on-year increase in net profit to Rs 343 crore, while revenue rose 11.8 percent to Rs 1,603 crore. EBITDA increased 6.7 percent to Rs 483 crore, although the EBITDA margin narrowed to 30.1 percent from 31.6 percent in the year-ago quarter.