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Marico
R o b u s t g r o w t h , m a r g i n s o n t r a c k…
Marico reported a robust set of numbers with net sales witnessing a
growth of 33.2% to | 1048.6 crore led by 21% volume growth. This
constitutes 14% organic growth whereas 7% growth was from acquired
companies. Raw material cost as a percentage of sales rose from 51.1%
to in 57.1% due to a surge in copra and kardi prices. Despite a dip,
advertisement cost as percentage of sales fell from 11.9% to 9.8%.
Margins declined by 150 bps from 13.4% to 11.9%. Interest cost and
depreciation provisioning increased ~38% and ~40%, respectively, due
to consolidation of the acquired entities. Net profit grew by 15.0% to | 85
crore from | 73.9 crore in Q1FY11.
ƒ Highlights of the quarter
Parachute, the biggest brand of Marico, witnessed strong volume
growth of 10% mainly on account of introduction of two budget packs
of 175 ml at | 45 and 45 ml at | 12. The four variants of Saffola saw
15% volume growth. The hair oils portfolio of the company grew by
32% in volumes compared to Q1FY11. The robust growth in all
brands was on account of Marico’s conscious efforts to penetrate in
rural areas. The international business of the company also grew by
39% contributed by ICP, Vietnam.
V a l u a t i o n
At the CMP of | 163, the stock is trading at 29.5x and 24.6x its FY12E and
FY13E EPS of | 5.5 and | 6.6, respectively. With the robust volume
growth in all segments along with judicious price hikes over the last one
year, revenue growth for the company was robust. Simultaneously, any
correction in prices of copra and other input commodities would aid
margin growth, thereby resulting in strong earnings growth, going
forward. However, we believe the stock is fairly valued at 24x its FY13E
EPS of | 6.6. We have assigned a target price of | 160 and a HOLD rating.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Marico
R o b u s t g r o w t h , m a r g i n s o n t r a c k…
Marico reported a robust set of numbers with net sales witnessing a
growth of 33.2% to | 1048.6 crore led by 21% volume growth. This
constitutes 14% organic growth whereas 7% growth was from acquired
companies. Raw material cost as a percentage of sales rose from 51.1%
to in 57.1% due to a surge in copra and kardi prices. Despite a dip,
advertisement cost as percentage of sales fell from 11.9% to 9.8%.
Margins declined by 150 bps from 13.4% to 11.9%. Interest cost and
depreciation provisioning increased ~38% and ~40%, respectively, due
to consolidation of the acquired entities. Net profit grew by 15.0% to | 85
crore from | 73.9 crore in Q1FY11.
ƒ Highlights of the quarter
Parachute, the biggest brand of Marico, witnessed strong volume
growth of 10% mainly on account of introduction of two budget packs
of 175 ml at | 45 and 45 ml at | 12. The four variants of Saffola saw
15% volume growth. The hair oils portfolio of the company grew by
32% in volumes compared to Q1FY11. The robust growth in all
brands was on account of Marico’s conscious efforts to penetrate in
rural areas. The international business of the company also grew by
39% contributed by ICP, Vietnam.
V a l u a t i o n
At the CMP of | 163, the stock is trading at 29.5x and 24.6x its FY12E and
FY13E EPS of | 5.5 and | 6.6, respectively. With the robust volume
growth in all segments along with judicious price hikes over the last one
year, revenue growth for the company was robust. Simultaneously, any
correction in prices of copra and other input commodities would aid
margin growth, thereby resulting in strong earnings growth, going
forward. However, we believe the stock is fairly valued at 24x its FY13E
EPS of | 6.6. We have assigned a target price of | 160 and a HOLD rating.
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