Marico - Volumes Glossy; Margins Likely To Shine In Fy16; Result Update :: Edelweiss report link

Please Share::

�� India Equity Research Reports, IPO and Stock News Visit http://indiaer.blogspot.com/ for complete details ��

��

-->

Marico’s Q2FY15 revenue surpassed expectations, while PAT came in line due to higher tax rate. Consumer product business (CPB) recorded a 5 quarters’ high volume growth of 8% YoY, a classic case of how sharp inflationary conditions help the market leader. Market share gains reflected in improved volume growth ofParachute to 7% YoY (6% YoY in Q1FY15). 9.5% YoY jump in Saffola oil volumes compared to 8-9% YoY decline in Agro Tech’s Sundrop justifies Marico’s investment through A&P in the brand. Value-added hair oil posted 33% YoY value growth riding 4 quarters’ high volume surge of 13% YoY (Dabur grew 13.9% YoY).

Market standing improves further; international business strong

Copra prices (up 107% YoY) impacted EBITDA margin (down 142bps YoY), but helped expand market share by 65bps YTD. Youth business reported a strong growth of 21% YoY while foods grew 31% YoY led bySaffola Oats. International business volumes grew 5% YoY (9.6% in Q1FY15) impacted by 4% YoY constant currency growth (CCG) in Vietnam. However, overall CCG stood at robust 16% YoY with 16.2% EBITDA margin.

Q2FY15 conference call: Key takeaways

Rural growth (at 48% YoY) continues to outpace urban growth (at 30% YoY). Project ONE has helped increase direct reach in top 6 cities by 60%. It expects growth to pick up in H2FY15 riding improvement in urban consumption. Saffola oats grew 31% YoY and 62% share in the flavoured oats market. Youth portfolio grew 21% YoY (flattish YoY in Q1FY15). Copra prices have corrected 5-6% from peak levels; likely to correct in Q4FY15 as season for copra kicks-in in February. Marico took ~3% price increase in Saffola edible oil; no price hike needed for next 2-3 quarters. Marico intends to focus more on hair styling, serum and hair gain products which are likely to see accelerated growth rates than in deodorants.

LINK
https://www.edelweiss.in/research/Marico--Volumes-Glossy;-Margins-Likely-To-Shine-In-Fy16;-Result-Update-Q2FY15/27505.html