Angel Broking neutral on Marico

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Angel Broking has recommended neutral rating on Marico in its July 29, 2010 research report.

"Marico posted healthy top-line growth of 13% yoy, above estimates, led by 16% volume growth, with Parachute and Saffola registering 14% and 17.5% volume growth, respectively. The international business registered 22% yoy growth (in constant currency terms) whereas Kaya disappointed posting only 3% yoy growth. Recurring earnings grew 27% yoy (adjusted for excise duty provisioning), despite margin contraction, led by 950bp decline in tax rate. We have revised our estimates upwards by 2-3% and upgrade the stock from Reduce to Neutral. At the CMP of Rs 125, the stock is trading at 22.2x FY2012E earnings, (in line with its historical valuations). We upgrade the stock from Reduce to Neutral (modeling in our upward revision in estimates by 2-3%) with a fair value of Rs 124 (Rs 115) based on a P/E multiple of 22x FY2012E earnings," says Angel Broking research report.

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