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Marico information update: Signaling caution
Marico released an investor update highlighting that the consensus earnings estimates are
unlikely to be met by the company given:
• High raw-material pressure still hovering, which will impact the company’s
operating leverage
• Modest demand environment due to the global economic turmoil, which might
lead to volume loss
• High ad spends due to new product launches, which may compress operating
margins further
The company also maintained that it might not resort to any further price hikes as it might
affect its volume growth.
We had been considering the above risks in our forward estimates; however, owing to
further cautious stance adopted by the company, we marginally tweak our estimates
downwards and remain Neutral on the stock.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Marico information update: Signaling caution
Marico released an investor update highlighting that the consensus earnings estimates are
unlikely to be met by the company given:
• High raw-material pressure still hovering, which will impact the company’s
operating leverage
• Modest demand environment due to the global economic turmoil, which might
lead to volume loss
• High ad spends due to new product launches, which may compress operating
margins further
The company also maintained that it might not resort to any further price hikes as it might
affect its volume growth.
We had been considering the above risks in our forward estimates; however, owing to
further cautious stance adopted by the company, we marginally tweak our estimates
downwards and remain Neutral on the stock.
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