FMCG firm Colgate-Palmolive (India) today reported a 43.09 per cent decline in net profit-after-tax for the quarter ended December 31, 2010, to Rs 66.24 crore, mainly due to high spending on advertising activities.
The company had posted a net profit-after-tax of Rs 116.39 crore for the corresponding quarter of the previous year, Colgate-Palmolive (India) said in a filing to the Bombay Stock Exchange (BSE).
The company's revenue, however, was up 12.86 per cent to Rs 576.64 crore in the third quarter, compared to Rs 510.95 crore in the year-ago period, it added.
"During the quarter, the company continued to invest in its brand and equity-building activities with advertising and sales promotion expenditure at Rs 120.59 crore as against Rs 75.28 crore for the same period of the previous year.
"This additional investment, coupled with the lower deduction under the Income Tax Act on the profits of the Baddi manufacturing facility, has resulted in lower net profit-after-tax and earnings per share for the quarter," the filing said.
The company registered 12 per cent growth in sales volumes during the third quarter of FY'11, led by a 13 per cent jump in the toothpaste category. The company also saw volume growth of 24 per cent in the toothbrush segment during the reporting quarter, vis-a-vis the same period in 2009, it added.
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In an inflationary environment, every effort is being taken to achieve cost-effectiveness while ensuring that the company remains competitive in the market through judicious pricing actions," Colgate-Palmolive (India) Managing Director Mukul Deoras said.
Reacting to the results, shares of the company were down 2.25 per cent at Rs 824 apiece during afternoon trade on the BSE.