Marico Q1 PAT seen up 32% at Rs 112 cr

FMCG major Marico is set to announce its first quarter results of FY13 today. Analysts on an average expect the consolidated profit after tax to grow by 32% year-on-year to Rs 112 crore during the quarter.

Net sales are seen going up by 17% to Rs 1,228 crore from Rs 1,049 crore and earnings before interest, tax, depreciation and amortisation (EBITDA) are likely to go up by 32% to Rs 165 crore from Rs 125 crore during the same period.

Operating profit margin is expected to go up by 150 basis points to 13.4% in the quarter ended June 2012 as against 11.9% in a year ago period.

Analysts feel the company remains a favourite across brokerages, with most incorporating Marico in their top picks. They quite up-beat on the stock and expect over 30% bottomline growth for the next three quarters of FY13.

Revenues will be driven by robust volume growth across both of company’s flagship brands - Parachute and Saffola.

Brands like Parachute and Saffola are expected to continue the trajectory of double-digit volume growth. Indian consumer business could report volume growth of 10-12%.

Price increase undertaken in Q1 will further increase revenues. Domestic business will largely drive growth while international business growth is expected to remain muted or steady.

Margins will benefit from the decline in agri commodity costs

Softening of key input prices (copra – Hair oils / rice bran, palm etc – Saffola) will continue to trend gross margin expansion that was seen in Q4.

Gross margin expansion this quarter will also be driven by an extremely high input cost base for Q1FY12. Prices for copra - key raw material for Parachute - went down by around 40% YoY and 8% QoQ.

Copra forms around 40% of the total raw material cost. Some slowdown in the international business may put slight pressure on margins, say analysts.

Ad-spends will continue to appear higher as against last year.

Results could also show one month long numbers for Paras Pharma that acquired by Marico recently .

Marico acquired the personal care business of Paras Pharma from Reckitt Benkiser.