The 31 reports from 10 analysts offering long term price targets
for Marico Ltd. have an average target of 447.70. The consensus estimate
represents a downside of -5.52%
from the last price of 473.85.
Marico holds a strong foothold in the rural and semi-urban regions. With recovery in economic activities and growing demand for its products, Marico's performance should continue to improve further. We revise Target to Rs.483 based on 42x FY23E adj. EPS and recommend HOLD rating due to recent surge in stock price. Robust growth in volume supports topline Q4FY21 revenue surged 34.5% YoY (-5.2% QoQ) to Rs. 2,012cr, as the company benefited from strong volume growth of 25% in domestic market and constant...
Core portfolio delivers again; Input cost inflation a pain point in the very near term Marico Ltd's (MRCO) 4QFY21 consolidated topline grew way ahead of our estimate, up by 34.5% YoY to Rs20.1bn (vs our est. growth of 22.5% to Rs18.3bn) as its India revenue grew by 37.3% YoY, led by 25% volume growth (vs our est. of 18% volume growth). International revenue was up by 25.1% YoY. EBITDA grew by 13.1% YoY to Rs3.2bn (in-line with our est. of Rs3.2bn). Adj. PAT post MI grew by 16.1% YoY to Rs2.34bn (vs our est. growth of Rs2.27bn). Within the domestic business, core portfolios led the outperformance. Parachute Coconut Oil (Rigid packs) saw a stellar growth of 38% YoY, led by 29% volume growth. Even Saffola refined edible oils continued their strong growth momentum with 43% YoY growth, led by 17% volume...
Persistent Systems: We maintain BUY on Persistent Systems (PSYS). It is among our top picks in the sector, based on industry-leading growth profile, improving deal wins, and strong 4Q performance (despite Alliance seasonality). PSYS' growth leadership is premised on (1) strong new deal wins (USD 237mn new win ACV in 2HFY21) and increasing focus on client mining with larger deals stabilising the portfolio churn, (2) acceleration in Alliance business ahead, supported by portfolio and GTM strategy of T1 account, (3) technology differentiation and continued focus on partnerships (Salesforce, AWS, Red Hat) and sourcing for growth thrust, and (4) leadership augmentation (Salesforce, Europe, BFSI delivery). PSYS' operational improvement in FY21 is sustainable with an upward bias supported by efficiencies, utilisation, and offshore. Our target price of INR 2,350 values PSYS at 25x Mar-23E, supported by 26% EPS CAGR over FY21-23E and >40% RoIC. Zensar Technologies: Zensar's revenue continued to be under pressure (-3.4% QoQ CC) but its fall was in line with our estimate. The decline was broad-based with major verticals like Hi-Tech (top account), Consumer (Retail) and Banking (Project closure) registering a sequential drop in revenues. The company has been struggling to grow over the past five quarters and revenue declined by 12.0% YoY CC in FY21. Under the new CEO, the company is going through a complete strategy reset, with a clear focus on reviving growth. The emphasis will be on increasing the partnership ecosystem (hyperscalers), investing in the sales engine, and optimising talent. The company will also look for acquisitions to build capabilities in...
We believe tailwind of healthier food consumption is expected to grow the foods & Saffola business in the next two to three years. Moreover, hair oils categories are also expected to witness strong growth with a mix of volumes and price hikes. It is also clear that Marico is looking to gain volumes and market share by not tinkering with prices too frequently. We maintain our...
MRCO reported robust volume growth across categories while gross margins disappointed due to inflation in key RM prices. Although we expect volume growth to trend lower and margin pressure to sustain for next 2/3 quarters, outlook remains positive on account of 1) strategy to push volumes working in high inflationary environment in Parachute and VAHO 2) Improv ed competitive positioning of Saffola with double digit growth from 6 quarters, 3) Opportunity in Foods business with target of Rs 8.5bn revenue by FY24 and 4) Focus to increase rural reach by 25% in next 2 years. We believe near...
Marico retains a strong foothold in the rural and semi-urban regions. With economic activities on the rise and demand for its products returning to near-normal levels, Marico's performance should continue to improve further from hereon. We reiterate our BUY rating on the...
The hair oil categories has been saturated and seen a cyclical growth trends with inflationary price movement. Parachute & VAHO is expected to witness strong volume growth in medium term largely due to low base effect in next few quarters. Moreover, with the promotional offers taken off (effective price increase of 5%), prices are also likely to contribute to the revenue growth. Further, the management indicated impact of tapering down of copra prices would not result in any prices hikes & the company would be able to maintain its current margins. We expect overall revenue growth of 9.5%...
We are increasing FY21/22/23 EPS estimates marginally by 1.8/3.3/7.1% and our rating from Hold to Accumulate. MRCO has given optimistic outlook based on 1) Double digit volume growth in VAHO, 2) steady growth in parachute and Saffola and 3) scalability in oats and Honey with a target of Rs4.5-5bn sales by FY22 4) integration of Beardo acquisition 5) Structural cost savings of Rs 1.5bn in domestic business and 6) Improving growth outlook in Bangladesh and recovery in MENA. Although MRCO is near term input cost pressure in edible oils, LLP and Parachute, it has taken 15-20%...
Domestic core franchise delivers; Key input costs expected to cool off Marico Ltd's (MRCO) 3QFY21 consolidated topline grew by 16.3% YoY to Rs21.2bn (vs our est. growth of 11.4% to Rs20.3bn). Domestic revenue grew by 18% YoY, led by higher-than-estimated volume growth of 15% YoY with all the core categories doing well. The three-core domestic franchise of Parachute Rigids, Value Added Hair Oils (VAHO) and Saffola (Refined Edible Oils) posted volume growth of 8%, 21% and 17% YoY, respectively. VAHO surprised us this quarter, registering a strong growth after a soft 1HFY21, backed by a double-digit volume growth in most of the brands in the franchise. The company estimates healthy market share gain in the VAHO portfolio during the quarter. Rationalization of consumer offers in the...
Marico Ltd. (MRCO) released an update to provide a summary of the operating performance and demand trends witnessed in 3QFY21. The company witnessed a faster-than-expected recovery in consumer sentiment in the domestic business, led by festive season and a declining Covid-19 graph. The domestic business (75%+ of the company's revenue), has recorded double-digit volume & revenue growth during the quarter. International business has registered high singledigit constant currency (cc) growth, led by double-digit growth in Bangladesh (in cc terms) along with recovery in few other markets. Pricing action, cost-saving initiatives along with judicious A&P; spends will lead to a healthy profit growth in 3QFY21 even though the company is witnessing input cost headwinds. The stock currently trades at 41x/37x FY22/FY23 EPS as we...
Amara Raja Batteries: Amara Raja reported a healthy quarter as revenue grew 14% YoY, driven by pent-up demand. The growth was across automotive segment (2W/4W replacement sales and higher home inverter sales) as well as industrial (higher telecom, UPS segment). While margins expanded to 17.6% on improved operating leverage, we believe that profitability will be lower in 2H as lead prices are firming up. Further, revenue growth is expected to moderate as the home inverter demand is seasonal. Amara Raja will continue to gain market share from the unorganised segment in the near term. However, the co's future technology partnerships (after the exit of Johnson Controls) and its ability to foray into alternate battery chemistries will determine growth opportunities in the longer term. Reiterate ADD with a TP of Rs 840 at 19x Sep-22 EPS. We raise our FY22/23E estimates by ~3% to factor in the better-than-expected results. RBL Bank: A strong rebound in fee income and lower-than-expected operating costs resulted in a significant earnings beat. The bank saw improving deposit (particularly retail) traction, which is creditable. The imminent capital raise is an additional positive. We continue to expect a sharp rise in GNPAs in FY21E. Credit costs will remain elevated in the near term, denting return ratios. This drives our REDUCE rating. We have a target price of Rs 179. Axis Bank: We maintain BUY on AXSB with a target price of Rs 616. AXSB saw strong operating profit growth, led by robust NII growth, a sequential rebound in core fees, and controlled operating costs....
Saturated hair oil category; growth prospects in foods Hair oil category is saturated with limited growth opportunity. In Parachute, ~30% category is unorganised creating limited opportunity to grow through market share gains only. Similarly, VAHO segment has become crowded with too many brands chasing a limited opportunity. We believe growth opportunity for Marico is limited to select brands in VAHO. We believe continued demand for healthier edible oil & food products would result in stronger growth for entire Saffola franchise that is contributing ~25% of...
India core franchise and Bangladesh lead growth; Input cost to hurt 3Q Marico Ltd's (MRCO) 2QFY21 consolidated topline grew by 8.7% YoY to Rs19.89bn (vs our est. growth of 8.2% to Rs19.8bn). Domestic revenue grew by 7.9% YoY, led by volume growth of 11% YoY with the core franchise leading growth during the quarter. The three core categories of Parachute Rigids, Value Added Hair Oils (VAHO) and Saffola (Refined Edible Oils) posted volume growth of 10%, 4% and 20% YoY, respectively. Domestic realizations in 2QFY21 were down largely on account of increase in promotional intensity (including below-the-line spends), price discounts in the Parachute portfolio and adverse mix in VAHO. The Foods portfolio grew by 55% YoY in value terms with the base Oats franchise posting 45% YoY...
Marico's (MRCO) 2QFY21 earnings were largely in line, barring the 11% volume growth (v/s est. 7.3%). Over the past year, MRCO has witnessed remarkable recovery in its key segments Parachute, Saffola and more recently in case of VAHO. Importantly, the outlook remains strong with guidance of 8-10% volume growth in 2HFY21 as well. While the stock is up 40% since our upgrade in Mar'20, robust sales outlook and inexpensive valuations (37x FY22E, 20% discount to peer average),...
We cut FY21/22/23 EPS estimates of MRCO by 2.3%, 0.8%, 1.8% even as Change in Estimates | Target | Reco MRCO remains optimistic on growth led by Edible oil, Foods portfolio, Bangladesh and Vietnam. Parachute and VAHO seem well poised for growth...
Parachute rigid packs to maintain 5-7% volume growth, while Saffola edible oil would achieve low-teens volume growth in the near to medium term. Though higher copra prices would impact gross margins in the near term, operating efficiencies would help mitigate impact on OPM. We have broadly maintained our earnings estimates for FY2021/22/23E. We retain a Buy on the stock with an unchanged price target of Rs. 420. Marico's consolidated revenues grew by ~9% in Q2FY2021 driven by an 11% volume growth in the domestic business and 7% constant currency growth in the international business....
Saffola franchise and cost savings to support earnings growth We recently interacted with Mr. Pawan Agarwal, CFO, Marico Ltd. (MRCO) in order to get an update on the overall operating environment and demand trends being witnessed on ground. After witnessing YoY volume growth in May-June'20, company's domestic business has seen growth in July'20 and August'20 as well. It has been primarily led by the Saffola franchise (Edible Oils and Foods), partially by coconut oil and new launches made in the health & hygiene space. On the international front, Bangladesh has managed to remain on a firm footing. Copra...
Revenue is expected to recover to mid-to-high single digits in Q2FY2021 from 3% in May-June (and an 11% decline in Q1FY2021). Core brands Parachute coconut oil have recovered and registered sales that is better than pre-COVID levels (in July-August); Saffola edible oil continues to get good demand and is expected to register an 8-12% volume growth. Conservative ad-spends and stringent cost-saving measures would help company save Rs. 150 crore in FY2021; consolidated OPM to remain at over 20%. Stock is trading at 36x its FY2022E earnings, which is at discount to large-cap...
