Colgate-Palmolive shares have risen dramatically since late June 2024. The stock is now on a 9-week winning streak, up 28 percent from Rs 2,826 on June 21 to a high of Rs 3,615 in transactions today. During the same period, the benchmark NSE Nifty 50 index increased by 5.5%.
Recently, the stock has traded at record highs. The increase at the counter is linked to a recovery in the FMCG sector. Furthermore, the corporation reported good results for the June quarter.
Colgate's net profit for the quarter ended June 2024 increased 33 percent year on year (Y-o-Y), owing to increased demand and strong product performance. The company's net profit in the first quarter increased to Rs 364 crore, up from INR 331.40 crore in the same period in FY24. Revenue from operations climbed by 13.1% YoY to Rs1,497 crore, above Bloomberg's forecast of Rs1,429.40 crore.
Despite a rise in advertising spend of 10% year on year, earnings before interest, taxes, depreciation, and amortization (EBITDA) margins were stable.
Analysts at brokerage company Nuvama are bullish on the consumer goods industry, naming Colgate-Palmolive, Pidilite Industries, Britannia, and Bikaji as their top picks. Analysts say the favorable prognosis is fueled by strong earnings reports and an expected recovery in demand, as well as distribution growth.
Can Colgate stock continue to prosper in the future, considering its 28% increase in value? Here's what the charts indicate:
Colgate Palmolive
Current price: Rs 3,600
Upside Potential: 7.6%
Support: Rs 3,565 and Rs 3,500
Resistance: Rs 3,660 and Rs 3,745
Given the rapid recovery, the price-to-moving averages action is still favorable for Colgate across time periods. On a daily basis, the stock is overbought and may encounter some resistance at the upper end of the Bollinger Bands due to fatigue observed on major momentum oscillators.
As a result, the stock is likely to see resistance around Rs 3,660. Meanwhile, the long-term chart indicates that Colgate's general bias is expected to stay optimistic as long as it trades above Rs 3,500; intermediate support for the company is indicated at Rs 3,565. On the upside, the stock might test Rs 3,875, with an intermediate obstacle around Rs 3,745 levels.
According to futures and options data, the Colgate PCR (Put Call Ratio) is 1.2, meaning that Puts have more open holdings than Calls. The largest open interest (OI) in Calls is observed around Rs 3,600 Strike, followed by Rs 3,700 and Rs 3,400. In the case of puts, the greatest OI is seen around Rs 3,400 Strike.
The options premium price shows that the stock might see resistance between Rs 3,630 and Rs 3,700, with support around Rs 3,500.
