Growth opportunities in India’s oral care market
Colgate-Palmolive (India) is a leading oral care company that has been present in India since 1937. Its entrenched Colgate brand occupies the #1 spot across the country, has been ranked “Most Trusted Brand” in oral care for several years and is endorsed by more than 70% of dentists in India. Colgate has more than 54% share of the Indian market, more than three times that of its next largest competitor.
Colgate’s relentless focus on brand building (it spends significantly more than peers on advertising and promotion) and strong distribution advantage (reaching 240 million households across India via 6 million points of sales) continues to cement its dominant market position. Rising commodity costs have led to concerns about profitability, but we believe its dominant consumer brand should translate into strong pricing power, which means that Colgate should be able to increase its prices to offset the higher input costs. The company has a long track record of improving its profitability consistently.
We believe the potential growth opportunity for Colgate is significant, as per-capita consumption of toothpaste in India is still only half of that in other developing markets. Colgate is also expected to grow in other personal care categories as it launches new products under the Palmolive brand. Its strong franchise has driven exceptional returns over the long term, with return on capital employed (ROCE) reaching 144%, after having increased significantly in recent 15 years.
Oral care market is under-penetrated in India
Dominant market share and attractive returns over 15 years
Source: Company presentations, Nomura, FSSA Investment Managers, as at 31 May 2025.
Return on Capital Employed (ROCE) is a measure of a company's profitability and the efficiency with which its capital is employed.
Market share refers to calendar years while ROCE is based on fiscal years ended the following March.
Disclaimer: Reference to specific securities (if any) is included for the purpose of illustration only and should not be construed as a recommendation to buy or sell the same.
All securities mentioned herein may or may not form part of the holdings of FSSA Investment Managers’ portfolios at a certain point in time, and the holdings may change over time.