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S t r o n g r e s u l t s …
Marico’s Q3FY12 results were in line with our estimates with topline
growth of 19.2% to | 1057.8 crore (I-direct estimate: | 1033.5 crore).
Strong volume growth across categories and judicious price hikes have
led to this revenue growth. EBITDA margins for the company continue to
remain under pressure at 11.5% compared to 12.2% in the corresponding
quarter. The company has increased its advertisement cost to 12.7% of
sales compared to 9.7% to sales. The net profit witnessed moderate
growth of 12.6% due to lower margins, higher interest cost and
depreciation provisioning.
ƒ Strong volume growth
Marico’s topline growth of ~19% during the quarter was contributed by
13% volumes growth and ~6% price increases. Revenue growth remains
strong across categories. The consumer product group grew 38% to |
716 crore with volume growth of 16%. The international business division
grew 39% to | 267 crore with organic growth of 16% while revenues
through acquisition (Vietnam) have been 24%. The major growth has
been in Bangladesh to the tune of 40% and Middle-East while North
Africa region sales grew 24%. Revenues from Kaya have been | 75 crore,
almost 15% growth in same store revenues However, losses increased to
| 14.5 crore as against ~| 7 crore in previous quarters.
V a l u a t i o n
At the CMP, the stock is trading at 31.3x and 24.8x its FY12E and FY13E
EPS of | 5.3 and | 6.6, respectively. With sustainable volume growth
above ~13% despite the price hikes taken by the company, we believe
the stock has started getting a premium to its historic average. We believe
margins would be back on track in the coming quarters considering raw
material pressures have started to ease out. Hence, we remain positive on
the stock and value it at 26x its FY13E EPS at | 170. However, due to the
recent run-up in the stock we maintain our HOLD rating.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
CLICK here for PDF post link
S t r o n g r e s u l t s …
Marico’s Q3FY12 results were in line with our estimates with topline
growth of 19.2% to | 1057.8 crore (I-direct estimate: | 1033.5 crore).
Strong volume growth across categories and judicious price hikes have
led to this revenue growth. EBITDA margins for the company continue to
remain under pressure at 11.5% compared to 12.2% in the corresponding
quarter. The company has increased its advertisement cost to 12.7% of
sales compared to 9.7% to sales. The net profit witnessed moderate
growth of 12.6% due to lower margins, higher interest cost and
depreciation provisioning.
ƒ Strong volume growth
Marico’s topline growth of ~19% during the quarter was contributed by
13% volumes growth and ~6% price increases. Revenue growth remains
strong across categories. The consumer product group grew 38% to |
716 crore with volume growth of 16%. The international business division
grew 39% to | 267 crore with organic growth of 16% while revenues
through acquisition (Vietnam) have been 24%. The major growth has
been in Bangladesh to the tune of 40% and Middle-East while North
Africa region sales grew 24%. Revenues from Kaya have been | 75 crore,
almost 15% growth in same store revenues However, losses increased to
| 14.5 crore as against ~| 7 crore in previous quarters.
V a l u a t i o n
At the CMP, the stock is trading at 31.3x and 24.8x its FY12E and FY13E
EPS of | 5.3 and | 6.6, respectively. With sustainable volume growth
above ~13% despite the price hikes taken by the company, we believe
the stock has started getting a premium to its historic average. We believe
margins would be back on track in the coming quarters considering raw
material pressures have started to ease out. Hence, we remain positive on
the stock and value it at 26x its FY13E EPS at | 170. However, due to the
recent run-up in the stock we maintain our HOLD rating.
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