Marico a preferred pick, says Manoj Menon

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Marico a preferred pick, says Manoj Menon

Marico is a preferred pick in FMCG space, says Manoj Menon, Senior Analyst at Kotak Institutional Equities.

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Excerpts from Bazaar on CNBC-TV18 Watch the full show » ALSO READ See previous views by Manoj Menon See what other Experts & Brokerages are saying about Marico See messages about Marico

Marico is a preferred pick in FMCG space, says Manoj Menon, Senior Analyst at Kotak Institutional Equities.

Menon told CNBC-TV18, "Marico is again an interesting case here. If you look at one of the key inputs for Marico which is kopra which has got significant contributing factor to the way the company manages has to look at their profitability. Its been actually very sticky inflation kopra for a fairly long period of time so in that sense Marico is facing some tricky situations in terms of the price increases etc what they need to do if the input gets further inflationary so that's point one."

He further added, "We still like Marico, its one of the preferred picks for me for the simple reason that the same reason which we attributed to HUL in terms of distribution led growth. Marico is another company which has significantly invested in the last 1.5 years in terms of rural distribution wherein the current contribution of the rural sales for the company is around 32%, couple of years back this number was around 26-27%. So you actually have made those frontend investments thus company has got a chance to outperform the industry growth. Second, hair oil as a category in the last couple of years seems to have come off age wherein the attributes of personal care business seems to be what the consumer is believing in hair oil wherein Marico is a large beneficiary and that is manifested in the superlative growth what the company has been having particularly in the value added hair oil which is upwards of 25-30% and I would expect that trajectory to continue for some more time."