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.

ICICI Securities Ltd | Retail Equity Research India business volumes witnessed tepid growth of 6% YoY largely due to a significant decline in canteen stores department (CSD) sales. Volume growth ex-CSD was 7%. Value growth of 19.6% for Q2FY19 was driven by 25% price hike taken in Parachute portfolio to counter input cost inflation. Parachute, VAHO and Saffola witnessed YoY volume growth of 8%, 5% and 5%, respectively While copra prices corrected by more than 11% YoY, consumption...

We upgrade our rating to BUY given 16% correction in stock price and input Change in Estimates | Target | Reco 1) 34% decline in copra prices from the peak as cycle has reversed 2) growing...

Q1FY19 revenue growth driven by strong domestic growth of 23% with volume growth of 12% on low comparables. EBITDA margins dipped 180bps YoY on higher input costs. EBITDA grew 9%YoY supported by lower ad expenses (-157bps YoY) and other expenses....

Marico has delivered strong quarterly performance in the backdrop of the extremely challenging input cost environment, with healthy volume growth across key segments including Parachute Rigids (+9% YoY), Value Added Hair Oils (VAHO) (+15% YoY) and Saffola (+15% YoY). YoY comparison is not possible as Q1FY18 was a pre-GST quarter. The company continue to face Gross margin pressure due to steep increase in copra prices, which Marico countered with price hikes in the Coconut Oil portfolio. While near-term earnings shall continue to face pressure on weaker margins (higher copra...

ICICI Securities Ltd | Retail Equity Research Consolidated sales for the quarter grew by 20.5% YoY to | 2026.8 crore (above our estimate of | 1855.2 crore) led by 12.4% increase in India business volumes in addition to ~25% price hike taken by the company in parachute portfolio. India business reported a growth of 22.6% YoY and the international business grew by 12.8% YoY....

We value Marico based on P/E of 35x Jun-20, and arrive at a TP of Rs 388 (earlier Rs 388). Maintain BUY. Marico reported an in-line quarter, marked with the end of margin pressure in this copra cycle. Net revenues grew by 20% YoY to Rs 20.3bn (exp. 17%). We anticipated margin pressure owing to copra inflation, partially offset by rationalization of ASP and other expenses. EBITDA/PAT grew by 9/10% (exp. 6/8%).

Revenue fell by 8.88% to Rs. 1480.09 Cr in Q4FY18 when compared to the previous quarter. Marico Ltd Q4FY18 Results Comment

We maintain our Hold rating on Marico Ltd with an upward revised target price of Rs 342 (earlier Rs 333). During FY18, Marico registered revenue growth of 7% YoY with volume growth of 1.3%. Rural growth continued to outpace urban growth. Adjusted PAT rose 7% YoY. Persistent inflation in copra prices (up 75%) during the year continued to dent margins. EBITDA was down 1.8% in FY18 with a margin contraction of 170bps to 18%. In FY18, Marico undertook aggregated price hike of 22% in Parachute. Management expects copra prices to remain firm in H1FY19 and expects operating margin to be in the range of 17-18% over the medium term. Better monsoon, benefits of GST implementation, recovery in CSD channel, changing macros are expected...

We value Marico based on P/E of 35x Mar-20, and arrive at a TP of Rs 376. Maintain BUY. Maricos revenues grew by 13% YoY to Rs 14.8bn (in-line). EBITDA margin dip was more than expected due to higher gross margin pressure. EBITDA/PAT increased by (2)/4% vs. expectation of 4/10% respectively.

Marico's (MRCO) 4QFY18 sales grew 12.6% YoY to INR14.8b (est. of INR14.6b). Domestic volume growth stood at 1% YoY (est. of +5%), while overall volume growth was 2% YoY. Domestic revenue grew 12% YoY, while reported international revenue grew 13% YoY (+16% on a CC basis). Consol. gross margin contracted 550bp YoY to 46.6%, mainly as copra costs increased 61% YoY. Consol. A&P expenses declined 50bp YoY. Other expenditure declined by 190bp YoY and staff costs by 50bp YoY. EBITDA margin contracted 260bp YoY (est. of -20bp) to 17%

Delayed pricing for Parachute helped recover volume but, we view this move to be tactical. Consolidated net sales, EBITDA, and adj. PAT grew 15%, 11%, and 17% (vs. consensus estimate of 13%, 6%, and 7%). India volume grew 9% YoY (Parachute +15% and VAHO +8%).

We maintain BUY by valuing Marico based on P/E of 35x Dec-19, and derive a TP of Rs 380. Maricos consolidated net revenue on a comparable basis grew by 18% YoY to Rs 16.2bn (in-line). EBITDA/PAT were up by 11/17% vs. expectation of 10/9% respectively. Domestic business (77% of total) recovered strongly (-9% in Q3FY17) with 19/9% value/volume growth driven by urban/rural growing at 15/26% in value terms. We expected 17/11% value/volume growth, respectively.

Marico's 3QFY18 numbers were marginally ahead of our estimates. Consolidated revenue grew by 15.1% YoY to Rs16.2bn (vs. our estimate of Rs15.9bn), EBITDA rose by 10.7% YoY to Rs3bn (vs. our estimate of Rs2.9bn) and net profit surged by 16.5% YoY to Rs2.2bn (vs. our estimate of Rs2bn). While India business reported 19% YoY growth in revenue, international business reported flat growth. Higher growth in net profit is also attributable to lower tax rates due to tax concession for new Guwahati manufacturing facility. Although, higher input cost especially Copra remains a near-term challenge, we expect Marico to exercise its pricing power to maintain the gross margins. in coming quarters. Notably, volume...