Colgate India will Appeal against Income Tax Demand of Rs.254.27 Crore

Colgate-Palmolive (India) Ltd. announced on Tuesday that it intends to challenge a recent Income Tax Authority order demanding Rs.254.27 crore for the financial year 2021-22. The order included an intimation for Rs.170 crore, which was sent to the company.

The FMCG company stated that it would contest the order before the Income Tax Appellate Tribunal and confirmed that the tax liability did not affect it.

The current demand follows an earlier tax notice issued in July by the Income Tax Authority, which raised a transfer pricing-related demand of Rs.248.74 crore for the financial year ending March 2021. Colgate-Palmolive (India) accepted the earlier notice, stating that the company intends to handle the matter in accordance with due process.

In its September quarter results, the toothpaste manufacturer recorded a 10% year-on-year revenue gain, reaching Rs.1,618 crore, which is close to Bloomberg’s expectation of Rs 1,634 crore. The company’s operational income, or earnings before interest, tax, depreciation, and amortization, increased by 3.1% to Rs.496 crore, although its margin fell to 30.7% from 32.7% a year before. Colgate India’s profits

Colgate-Palmolive (India) shares resumed their downward trend on Tuesday following a one-day pause. The stock closed 0.4% lower at Rs.3,093 on the National Stock Exchange. That compares to a 0.5% increase in the country’s benchmark NSE Nifty 50. The stock is down 22.3% this year.

Bloomberg tracks 35 analysts; seven have a “buy” rating on the stock, 14 have a “hold” rating, and Reiding has a “sell” call. Bloomberg tracked the analysts’ consensus 12-month price objective of Rs.3,209.38, representing a 3.7% increase from Monday’s finish.