Colgate-Palmolive was beaten down 2.11% to Rs 145.85 today after the company issued a denial to dispel speculation over a buy-back offer.

By 12:15 IST, the scrip of the oral care MNC had come off its high of Rs 150.50. A total of 42,461 Colgate-Palmolive shares were recorded on BSE thus far.

In the three sessions between 4 and 9 June 2003, the stock of Colgate jumped 12.5% to Rs 149 from Rs 132.50 as the market anticipated that a buy-back of shares was forthcoming from the company.

Another trigger was the rumours that a huge dividend for FY 2002-03 was in the offing. In fact, a flush of rumours have been abounding on the counter of late including the one that contented that a global restructuring by Unilever would see the latter's oral care segment in India pass into the hands of Colgate-Palmolive India and that Anchor, a competitor in the dental care segment, was finding the going tough.

Hopes of a normal monsoon this year also propelled FMCG stocks in general. The rural markets account for almost 60-65% of the revenues of the fast moving consumer goods (FMCG) sector.

The company will announce its fourth quarter as well as full year ended 31 March 2003 results today. According to a capitalmarket.com poll, the company is expected to post a 6.5% to 16% fall in net profit, in the range of Rs 18 crore and Rs 20 crore (in the quarter), on net sales of between Rs 248 crore and Rs 253 crore, a fall of 5% to 7%.

Analysts feel that Colgate-Palmolive India's top line is still feeling the pinch of the poor monsoon last year. Besides, unorganised players and new entrants have heightened competition.

The slowdown in the FMCG sector in general, and the toothpaste category in particular, continues to pose a major challenge to Colgate-Palmolive India. Overall, analysts are pessimistic about the company's growth prospects. However, the company could continue to show a moderate rise in bottom line due to its sustained efforts towards improving operating efficiency and lowering materials costs.

For the third quarter ended 31 December 2002, the company posted a 32.7% rise in net profit to Rs 21.1 crore, compared to Rs 15.9 crore in the corresponding period of the previous year. Total income decreased by 8.04% to Rs 274.5 crore from Rs 298.5 crore in DQ 2001.

Colgate-Palmolive India, a 51% subsidiary of Colgate-Palmolive, USA, is India's largest toothpaste maker by market share. In the Rs 1,000-crore toothpaste market, it commands around 50% share. Its product range includes tooth pastes, tooth powders and tooth brushes under the 'Colgate' brand. The company is also a leading producer of personal care products under the 'Palmolive' brand.