New product launches in the premium segments as well as increased focus on direct channel distributions and improving cost synergies should help maintain growth. We reiterate our BUY rating on the stock with a revised target price of Rs. 413 based on 43x FY22E adj. EPS. Pandemic hits volumes impacting topline Q1FY21 revenue declined 11.1% YoY to Rs. 1,925cr due to severe impact in domestic business in April, even as volume recovery can be seen from May onwards (upwards of 3.0% YoY). Revenue from India operations stood at Rs. 1,480cr (-14.5% YoY)....

Nippon Life India Asset Management: While we remain concerned about the loss of market share in both debt and equity assetsdown 332/275bps since Mar-19 to 7.5/6.8%we believe that post ownership change, NAM stands to benefit from increased credibility to raise HNI/institutional capital. We expect the company to focus on improving investment return performance and gradually recoup part of its lost market share, although this journey would neither be easy nor inexpensive. We expect NAM to post an FY21-23E revenue/PAT CAGR of 13.7/15.8% and retain a REDUCE rating with TP of Rs 280 i.e. at 36x (20% discount to HDFCAMC's multiple) FY22E NOPLAT + cash and investments. Any signs of improving performance and market share will be key re-rating drivers for the stock. Crompton Consumer: Crompton's 1QFY21 revenue was slightly lower than estimates, declining by 47% YoY vs our estimated figure of 41% YoY. At the same time, there was a beat in EBITDA by 10% despite our estimate being higher than consensus'. Efficient cost control by the company has supported its margin in the current crisis. ECD revenue/EBIT decline was 44% YoY (better than Havells and Orient Electic). ECD saw a sequential recovery as May was down by 30% while June was down only 10% YoY. Some categories like agri pumps, geysers, appliances and mixer-grinders recorded strong growth in June. Lighting saw revenue/EBIT dip by 57/61% YoY. The B-C pick-up was healthy (9% YoY growth in June) while B-B is gradually improving. Stability in pricing in B-C lighting is supporting the segment's margin, which deteriorated in...

Marico Ltd. (MRCOs) 1QFY21 consolidated topline was down 11.1% YoY at Rs19.3bn (vs our est. decline of 13.3% to Rs18.8bn). Domestic revenue declined by 14.5% YoY with underlying volume declining by 14% YoY (vs est. 13% decline). India business was severely impacted in April but has scaled-up in May and June. Trade spends were rationalized during the quarter which supported value growth. Within the domestic business, Parachute Rigids and Value Added Hair Oils (VAHO) portfolio declined by 12% and 32% YoY, respectively, while Saffola Edible Oils posted a robust growth of 16% YoY. The business was also supported by healthy growth in the Foods portfolio (value growth of 30% YoY in 1QFY21) and the newly introduced hygiene portfolio. In the International business, Vietnam,...

Hair oils contribute 62% of domestic sales. The category is saturated and major brands are only growing by gaining market share from unorganised sector. Though Marico aims to further gain market share in coconut oil by passing on benefit of lower copra prices, growth prospects remain limited as the organised market has already reached above 65%. VAHO performance has remain muted in the last four quarter (Q4 & Q1 have been impacted by lockdown). With expected down trading, Marico is expected to gain market share in the economy category with Nihar Shanti Amla brand....

is likely to continue the momentum as medium-term macro The company remains cautious on the business outlook, but would be aggressive on cost management to enable it to tide over challenging MRCO is cautious on the near-term outlook for the business, but expects to protect the core franchise of Ethnic Hair Care and Healthcare future business prospects as it incubates new geographies to expand the The company would be comfortable maintaining the operating margin at 19% plus over the medium term. Growth in Saffola (edible oil brand) has tapered off in recent years, partly as a result of strategic mistakes in terms of pricing and partly due to the company being unable to cater to the recently emerged Super Premium market segment. both topline growth and margin is optimistic v/s prior fears of EPS decline in While the jury is still out on success achieved in terms of new product trajectory as well as valuation multiples, the stock at 36.8x FY22 EPS appears to still provide healthy upside over the next year, with superior outlook than most peers and a far less volatile international business.

1Q impacted but operations back to near normal Marico Ltd. (MRCO) released an update to provide a summary of the operating performance and demand trends witnessed in 1QFY21. The domestic business is expected to see a low teen YoY decline in volume during the quarter but business is improving on a month on month basis, led by the Saffola (Edible oils & Foods) and Parachute portfolio. The impact of total or partial lockdowns on the overall international business is low to moderate. Raw material prices are benign for the quarter. This along with aggressive cost control and rationalization of A&P; spends...

Marico's Q1FY21 earnings were above our estimates on all fronts. Consolidated revenue stood at Rs 19,250 mn, above our estimate of Rs 18,470 mn, registering a growth of +28.68% QoQ/-11.13% YoY. Reported EBITDA grew by +65.60% QoQ/+0.86% YoY to Rs 4,670 mn, above our estimate of Rs 3,694 mn, while EBITDA margin expanded by 541bps QoQ/288bps YoY, aggressive cost control and rationalization of A&P; spends in few discretionary portfolios on a lower topline, will lead to expansion of operating margins compared to the corresponding quarter last year. PAT for...

impacted by COVID-19 among the sectors, b) a significant share of migrant labor has returned to villages, potentially resulting in the lower end of consumption shifting to rural, c) the forecast for monsoon is better than the long-term average, and d) MGNREGA wages have been raised. relatively discretionary categories (35% of the portfolio) such as male styling, premium hair nourishment, and premium hair oil in the Value-Added Hair Oil (VAHO) to witness impact on sales in the near term. falling wage rates, b) low food inflation / high non-food inflation, and c) low However company believes that, going ahead, rural should perform better than the sectors, b) a significant share of migrant labor has returned to villages, potentially resulting in the lower end of consumption shifting to rural, c) the forecast for monsoon is better than the long-term average, and d) MGNREGA In the Coconut Oil category, 35% of the market is unorganized (loose form).

We recommend a BUY on MARICO with a Target Price of Rs 333, an upside of 6% from CMP of Rs. 317 and Stop Loss Rs 307.

We cut our EPS estimates by 1% for FY20/FY21 (4/6% cut in our thematic report in April). We value Marico at 30x on Mar-22E EPS, our TP is at Rs 287. Maintain REDUCE. Maricos performance in 4QFY20 was broadly in line with our estimates driven by a surge in Saffola. The rest of the cos portfolio remained under pressure and lockdown decelerated PCNO/VAHO by 12/18% respectively. Co had witnessed marginal recovery in PCNO and VAHO in Jan-Feb, but it was short lived as it impacted by lockdown. Although supply side issues will be resolved in the coming months (as of now 70-80% utilisation) but demand side pressure will impact FY21 (particularly to VAHO/PC). International business (22% of total) was impacted (5% decline) by restrictions in MENA and lockdown in Bangladesh. It is expected to remain weak in FY21. Co is focusing on various cost controls and along with softness in copra in FY21 to support EBITDA margin.

With one of the biggest challenges faced by the economy in the last decade, income levels of bottom of the pyramid are likely to be adversely impacted. In turn, this is expected to result in cutting down of discretionary spends. However, consumer focus would clearly shift towards food, health & hygiene. An indication of that has been seen in strong Q4 Saffola sales. During the lockdown period, the robust growth in Saffola can be attributed to (1) heightened media spend & in-store promotion by the company in January-February, (2) stocking up by consumers & retailers in last two weeks...

of 5.5% to Rs.15.2bn). Domestic net sales declined by 8% with underlying volumes declining by 3% YoY (est. -2.1%). India business would have delivered flattish revenue growth with low to mid-single CMP: Rs284 digit volume growth during the quarter, had Covid-19 disruptions not occurred. Within the domestic business, Parachute Rigids and Value Added Hair Oils (VAHO) portfolio declined by 12% and 18% Target Price: Rs345 respectively, while Saffola Edible Oils posted a robust growth of 25% as the company could only record sales in Saffola Oils and Foods portfolio at the end of March post the lockdown. In the Upside: 21% International business, while MENA and South Africa were down by 50% and 26% in constant currency (CC) terms, Bangladesh and Vietnam business did relatively well growing at 6% and 1% in Vishal Punmiya...

Marico's Q4 performance was relatively better than peers, led by strong growth in Saffola. Consolidated sales declined 7% - marginally lower than estimates, whereas EBITDA and PBT fell 3-4% but still better than expectations on lower ad spends (down 18%). India business dropped 8% and as per management, growth would have been flat, excluding disruptions. Saffola's improved growth outlook and management's increased...

Green shoots until early March obstructed by Covid-19 disruption Marico's Q4FY20 revenue and EBITDA came below our estimate but APAT was in line. India business reported 3% volume de-growth while overall volume de-growth was 4%....

Valuations appear attractive at 32x FY22E EPS, below 3/5/10-year average for a business that has better earnings visibility Overall volume declined 4% YoY while EBITDA decreased 4.1% YoY to INR2.8b (v/s est. In the medium term, MRCO aims to revive growth in this franchise by adopting a three-pronged strategy, which includes (a) aggressive participation at the pyramids bottom on the back of its leadership position, (b) accelerating growth in the mid segment through pricing and brand renovation, and (c) aiming to gain market share in the premium segments (where the company is relatively under- represented) through innovations that offer higher order sensorial/functional refined edible oils grew 25% in volume terms in 4QFY20 on robust base (+9% in FY20). Mid-single-digit primary terms would have been witnessed if not for the COVID- volumes had recovered before COVID-19 v/s the previous 90-95% of MRCOs portfolio gained market share.

In fact, with the ongoing sharp reduction in crude costs, MRCO could gain more on the gross margin front in the coming total sales) is likely to report gradual recovery in volume growth after the price reductions, recovery in Saffola (13%) witnessed in 3QFY20 is at an early stage and cannot yet be termed a turnaround. However, over the past 5 years, growth while healthy has tapered off with the companys sales at ~5%, EBITDA at 11% and PAT at The stock has corrected nearly 35% since we downgraded MRCO to Neutral at end-2QFY20 results due to the company reporting a sharp deceleration in volume growth, a trend that has well continued in 3QFY20 Trailing FY20 valuations of 32.2x FY20E EPS and FY21/FY22 valuations of 33.4x/27.5x FY22E respectively (much lower than 3-year/5-year/10-year average of 44.8x/ 42.7x/35.2x) offers potential for an upside.

Marico's Q4FY2020 performance was affected by supply disruption in the fag-end of the quarter caused by lockdown due to spread of COVID-19. The company's revenue declined by 7% with India business revenue declining by 8% (volume decline of 3%) and international business down by 5% during the quarter. If supply disruption would have not been there, volume growth would have been in mid-single digit. Parachute rigid pack and value-added hair oil posted 8% and 11% decline in sales volume, respectively, while Saffola edible oil witnessed 25% volume growth due to stocking of food products prior to the...

Delayed recovery than earlier envisaged; Risk-reward favorable Marico's (MRCO) recent performance has been below expectations due to both macro and some internal factors. Subdued category growth across portfolio due to consumption slowdown (especially in rural markets), liquidity issue in trade channel, correction of inventory in distribution channel to support ROI and reverse migration from branded to loose in some categories have been the key reasons for the below par topline growth in MRCO's domestic business. Domestic category growth across non-packaged food categories witnessed deceleration on a sequential and YoY basis in 3QFY20, and the...

Gradual recovery in demand is expected going forward. At current level, the stock looks attractive and hence we upgrade our rating to a BUY with a roll forward target price of Rs. 353 based on 35.0x FY22E adj. EPS. Sales volumes decline; Margins improve Q3FY20 revenue declined 2.0% YoY to Rs. 1,824cr due to lower domestic sales volumes amid continued slowdown in consumption. Domestic business posted sales decline of 4.8% YoY to Rs. 1,380cr, while International business continued to grow at Rs. 444cr (+7.9% YoY). On constant currency basis, Bangladesh business grew 15.0%...

Marico's 3QFY20 consolidated topline was down by 2% YoY at Rs. 18.2bn (our est. 0.9% growth to Rs.18.8bn) as domestic net sales declined by 5%. Underlying domestic volume declined by 1% YoY Sector: FMCG (est. -0.3%). EBITDA was up 3.9% YoY at Rs. 3.7bn (our est. +8.9% to Rs. 3.8bn). Adj. PAT grew by 10.6% YoY to Rs. 2.7bn (our est. +7.6% to Rs. 2.66bn). On the domestic front, while Parachute Rigids CMP: Rs315...