Marico Q3 PAT seen up 20% at Rs 85 cr

Sales are likely to go up by 21.5% to Rs 994 crore from Rs 817.7 year-on-year.

Operating profit margin is expected to be flat at 12.1% versus 12.2% during the same period.

Highlights

* Domestic volume growth continues at a healthy 11-12%

* Slight softening in Parachute (around 1/3rd of sales); volume growth at around 7-8% versus 10% in Q2, which offsets by robust growth in hair oils and Saffola  

* International business volume growth estimated at around 18-19%; Egypt, Bangladesh slowdown will be watched  

* Rupee depreciation to be supportive for international biz

* Q3 did see some softening in raw material prices 

* Copra, around 40% of Marico’s costs went down 9% QoQ + slight softening in safflower 

* But others like Kardi, bran etc continued to be at a high, though largely stable QoQ

* Marginal price hikes in Q3 will be margin supportive 

But

* Company had been cutting down on ASP/sales for the last 4-5 quarters

* For e.g.: In Q2 ASP/Sales was at 9.7% versus 12.2% YoY

* Brand investments to improve again in Q3 - seen upwards of 11%

* Watch out for: Higher tax rate