The Indian arm of New York-based Colgate-Palmolive on Friday posted a decline of 25 per cent in net profit for the three months ended September 30, despite a notable increase in sales.

The maker of toothpastes and shaving creams said that its profit slipped by a quarter year-on-year to Rs 109.52 crore in the July-September quarter, while sales climbed 16 per cent to Rs 895.7 crore.

The decline in net profit was mainly due to higher advertising and other expenses, while growth in revenue was driven by a 10 per cent growth in volume.

In an accompanying statement, the company said its focus on driving efficiencies, slashing costs and prudent hike in prices led to higher gross margin, despite difficult economic conditions.

The company is now hoping to enjoy a rise of 4.5-5.5 per cent in annual profit, with an assumption that foreign exchange rates will remain quite stable. For 2014, the company is targeting double-digit earnings per share growth.

Colgate-Palmolive's board also announced an interim dividend of Rs 9 per share for fiscal 2014. The company will pay Rs 143.2 crore in dividends to shareholders.

Stock in Colgate-Palmolive enjoyed a slight jump of 0.02 per cent to Rs 1,278.75 per share yesterday on Bombay Stock Exchange.