Shares of Colgate-Palmolive (India) gained as much as 2 percent on Friday after the FMCG player announced that Prabha Narasimhan, a former Hindustan Unilever (HUL) executive, has been appointed the new CEO and MD of Colgate as Ram Raghavan moves to take over a role at the parent company.
However, the stock was unable to sustain initial gains and slipped into the red. At 1325 IST, the stock was down 0.1 percent at Rs 1,495.75 on BSE. It has fallen after three days of consecutive gain.
“Nomination & Remuneration Committee (“NRC”) of the Board of Directors of the Company, at its meeting held today, noted that effective April 16, 2022, Mr Ram Raghavan, Managing Director & CEO of the Company has been promoted to President, Enterprise Oral Care, for Colgate Palmolive Company, the parent Company of Colgate-Palmolive (India) Limited and will be based out of its headquarter at New York. Consequently, Mr Raghavan has informed the Company of his decision to resign from the office of Managing Director and CEO of the Company with effect from April 15, 2022,” the company said in an exchange filing.
“The NRC has further identified Ms Prabha Narasimhan as Managing Director and Chief Executive Officer of Colgate-Palmolive (India) Limited and recommended her name to the Board of Directors for her appointment as such effective from September 1, 2022,” the filing said.
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Here is what brokerages say:
JP Morgan:
An external hire for the position of CEO was slightly unexpected, said JP Morgan. The brokerage firm added that key priorities for the new CEO include accelerating revenue growth for the oral care business. Strengthening non-oral care portfolio positioning will be one of the focus areas, said JP Morgan which has a ‘neutral’ rating on Colgate shares with a target price of Rs 1,580.
Nomura
With Prabha Narasimhan becoming the new CEO and the first top management from outside, Nomura highlighted that the change in guard indicated renewed efforts to regain share. This new appointment would drive up expectations, said the brokerage firm. Although Nomura remains cautious on the company’s growth prospects in the medium-term, it has a ‘buy’ call with a target price of Rs 1,700.
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