We value the stock at a P/E of 39x on FY21E EPS and maintain Hold rating with a revised target price of Rs 390. Healthy volume growth in domestic & international business Sales grew by 9% YoY in Q4FY19 to Rs1,609cr backed by underlying domestic volume growth of 8% and value growth of 7%. Domestic volume growth was driven by Saffola segment which reported robust volume growth of 18% led by sustained marketing initiatives. Parachute rigid grew by 6% in volume terms with continued market share gain while Value added hair oils (VAHO)...

Marico is amidst a copra deflationary cycle and plans to capitalize by building its futuristic portfolio. The co. is reinvesting its GM expansion into higher A&P spends to support new launches. In the recent past, the co. has launched several products in categories like premium hair oil, food and male grooming. Although the products are niche and may not have a high success rate, we admire the management's aggression which will aid in driving product diversification and long-term growth. Maricos 4Q performance was mixed albeit healthier vs. Dabur & GCPL. Revenues missed our estimates despite in-line volume growth while GM expansion beat estimates (tactical purchase of RM). We cut EPS estimates by 4-5% over FY20-21E to factor moderation in demand and GM expansion. However, we remain constructive on Marico and believe its performance will be superior to its peers in FY20. We value the co. at 35x on FY21 EPS arriving at a TP of Rs 386. Maintain BUY.

Led by marketing initiatives and certain pricing changes, the Saffola witnessed a significant 19% volume growth against 2% in Q3FY19. The management expects this recovery to continue in coming quarters and has guided for mid-teens volume growth, going forward. We expect the company to witness superior volume trajectory on the back of improved Saffola numbers. Modern trade and e-commerce channels also helped growth in Saffola portfolio. As of today, e-commerce contribution to turnover has already crossed 3% compared to <1% on a YoY basis. We...

Easing of copra prices aided margin improvement. Maintain Accumulate. Marico's Q4FY19 revenue was below our estimate, but APAT was in line. Volume growth was 8%, on a base of 1% growth. Although volume growth in Saffola was impressive at 18%, VAHO's was a mere 1% in the quarter. The Saffola portfolio gained traction in modern trade and e-commerce. Going ahead, the company plans to introduce new improved offerings in...

Marico came out with good set of numbers in Q4FY19. Consolidated results were mostly in line with our estimate. Consolidated revenue for the quarter grew 8.7% YoY to Rs 16090 mn against our estimate of Rs 16490 mn. EBITDA for Q4FY19 came at Rs 2830 mn (estimate Rs 2940 mn) a growth of 12.3% YoY. EBITDA margin increased 56 bps YoY to 17.6% for the quarter against 17% in Q4FY18. Adjusted PAT (adjusted for one time tax write back of Rs 1880 mn) for the quarter stood at Rs 2130 mn ahead of our estimate of Rs 2010 mn, a growth of 18% YoY. We like Marico over other FMCG...

Volume growth stood at 8%; margin expansion due to lowering copra prices: Marico's consolidated revenue grew by ~9% to Rs. 1,609 crore with domestic volume growth standing at 8% (better than Q3FY19 volume growth of 5%). Rural general trade grew by 12%, as it continued to outpace urban market general trade growth, which stood at 1% in Q3FY2019. The correction...

6 May 2019 Domestic revenue increased ~6% YoY, led by volume growth of 8% YoY. (+160bp YoY to 9.5% of sales) and employee expenses (+30bp YoY to 7.3%) restricted EBITDA margin expansion to 50bp YoY (17.6% v/s our est. PAT grew 16%, 13% and 14%, respectively. EBITDA margin contracted 50bp YoY to 17.5%. (1) MRCO is targeting 8-10% volume growth in India and double-digit CC growth in international biz. (2) New products as a proportion of sales are likely to double over the next few years. (3) Domestic EBITDA margins are targeted to be over 20% and international margins over 18%. There is no material change to our FY20/21 EPS forecasts, as the outlook remains strong with a likely EPS CAGR of ~21% over the next two years.

As mentioned in our 4QFY19 update for MRCO (2nd April'19), input cost pressure is easing, especially for copra, which accounts for 40-50% of the company's RM cost. Based on the latest data, copra Calicut price was down7.7% MoM in Mar'19. Costs of other key commodities -except LLP (+4.5%MoM) -also remain benign (Cochin coconut oil price down 6.6% MoM and HDPE price down 0.6% MoM)

The demand environment remained stable in 4QFY19 with good offtake growth. Rural traction remained intact, exceeding urban growth in the traditional channel. Newer channels (modern trade and e-commerce) are growing robustly. Even CSD has now stabilized, but some slowdown was observed in the wholesale channel, specifically in the month of Mar'18, the reason for which was not mentioned.

Marico, being one of India's leading consumer Products Group, in the global beauty and wellness space touches the lives of 1 out of every 3 Indians. Parachute is the leading brand in the Indian cosmetics & toiletries industry and has continued to show volume growth, though Safola growth was disappointing. Marico wants to reduce dependence on Parachute and Saffola by driving new things in the premium segment, like male grooming, serums, hair nourishment and foods are expected to have a significantly higher share in the next five years. Nevertheless,...

Q4FY2019 preview Revenue and PAT to grow by ~14% and ~20%, respectively: In-line with Marico's stable demand outlook, we believe the company is well poised to post double-digit revenue and earnings growth in Q4FY2019. We expect Marico's revenue to grow by 13.7% with sales volume of Parachute rigid packs growing by 6% and Saffola edible oil to grow by 3-4%...

global beauty and wellness space. Marico has extensive portfolio spanning hair care, skin care, edible oils, health foods, male grooming, and fabric care. Marico enjoys leadership position in 90% of its portfolio. As of FY18, International business accounted 22% of revenue. Domestic sales accounts for 78% of sales with Parachute rigid packs contributing 36% of sales, VAHO 26%...

We value Marico based on P/E of 35x Dec-20 with TP of Rs 394. Maintain BUY. Marico delivered a mixed bag with beat in revenue growth and miss on gross margins. Net revenues grew by 15% (exp of 13%) with volume growth of 6% (exp. 6%). The co. benefited from softening of copra prices (-23% YoY, -12% QoQ) but wasnt able to expand GM owing to volatile prices of other commodities. Maricos GM pressure was the least in 3Q vs. HUL, Dabur and Emami. EBITDA/APAT grew by 16/12% (exp 23/20%)

ICICI Securities Ltd | Retail Equity Research India business volumes witnessed muted growth of 5% YoY largely due to weakness in Saffola, non-core coconut oil and low end VAHO portfolio. Value growth of 12.8% for Q3FY19 was driven by price hike taken in Parachute portfolio to counter surge in copra prices over the last year. Parachute, VAHO and Saffola witnessed YoY volume growth of 9%, 7% and 2%, respectively While copra prices have corrected more than 23% YoY, inflation in...

Domestic revenue increased ~13% YoY, with 5% volume growth. EBITDA grew 15.8% YoY to INR3.5b (in-line). Adj. PAT increased 12.7% YoY to INR2.5b (in-line). However, EBITDA margin expenses (-20bp YoY to 8.8% of sales) and other expenditure (-50bp YoY to 12.2%), partly offset by higher staff costs (+20bp YoY to 6.5%).

We downgrade our rating from BUY to Accumulate given 1) 28% jump in stock price since our upgrade and 2) rising probability that Copra price decline in the current down cycle will be far lower than previous occasions....

Overall demand environment was good in 3QFY19 with market share gains across key portfolios. The positive sentiment during the quarter was led by festive season and expectations of a stimulus from Government initiatives.

Over the past few years, one of the disappointments investors harbored for Marico was regarding the subdued performance of its new launches. Except for Saffola Masala oats (launched over six years ago) none of the new launches have contributed significantly to the sales growth. However, over the past 18 months, Marico has pulled up its socks and now has a strong product pipeline with a few initial successes. We recently met Marico's management to understand reasons for the new improved pipeline and to gauge the company???s growth targets, going forward

Stock price run-up by 14% in one month; Margins to enhance in the coming quarters on account of receding copra prices: The stock price of Marico has moved up by ~14% in the past one month due to positive commentary by management on demand environment and margin improvement due to declining copra prices. Despite the recent run-up, the stock is...

We value Marico based on P/E of 35x Sep-20 with TP of Rs 380. Maintain BUY. Marico reported a commendable quarter with a beat in revenue and EBITDA growth. Net revenues grew by 20% YoY to Rs 18.4bn (exp. 12%). Volume growth of 6% (exp. 6%) is healthy given steep price hike and disruptions in CSD channel (7% vol. ex-CSD). Gross margin pressure decelerated in-line with our expectations.