Sharekhan's research report on Marico
Marico registered steady performance with Q3FY2021 revenues growing by 16.3%y-o-y, driven by improved growth across the domestic portfolio.OPM decreased by 100 bps to 19.5% mainly on account of a sharp increase in copra and other edible oil prices. Domestic sales volumes grew by 15% in Q3FY2021, led by 8% volume growth in Parachuterigid packs, strong 21% volume growth in value-added hair oil (VAHO) portfolio, and 17% volume growth in Saffola edible oil. Management is targeting to achieve 8%-10% volume growth in the domestic business (Q4 will be in double digits due to lower base). Copra prices have corrected from their peak and are expected to remain flat on a y-o-y basis in FY2022. This along with judicious price hikes would aid margins to remain stable.
We have fine tuned our earnings estimates for FY2021/FY2022/FY2023E. We retain Buy on the stock with an unchanged PT of Rs. 477.
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