Angel Broking neutral on Marico

Angel Broking has maintained neutral rating on Marico, in its February 5, 2013 research report.
 
“For 3QFY2013, Marico posted a 10% yoy growth in its consolidated net sales to Rs1,164cr, aided by a 9% volume growth. The OPM rose by 241bp on a yoy basis to 13.9% aided by a 353bp yoy expansion in gross margins. The net profit rose by 21.6% yoy to Rs102cr, aided by superior operating performance.”
 
“The domestic consumer business posted value and volume growth of 16% yoy and 15% yoy respectively. The organic domestic consumer business’ volume growth was 9%. The international business posted a flat performance on the top-line front due to challenging business environment in some of the countries in which the company has operations. On a constant currency basis the company posted a de-growth of 3% yoy on the top-line front due to de-growth in Middle East and strikes in Bangaladesh. The OPM rose by 241bp on a yoy basis to 13.9% aided by 353bp yoy expansion in gross margins due to lower copra prices. Average copra prices in 3QFY2013 were about 23% lower on a yoy basis. The company’s advertising expenses (as a % of sales) went up by 90bp on a yoy basis, which offset the decline in copra prices to some extent.”
 
“Going ahead, we expect Marico to post a healthy growth in the domestic business aided by its strong brands. The recent acquisitions made by the company too are expected to fuel growth in the future. At the current market price, the stock is trading at 28.1x FY2014E EPS. We believe the stock is fairly priced and hence, recommend a Neutral rating on the stock,” says Angel Broking research report.

Public holding more than 90% in Indian cos

Disclaimer: The views and investment tips expressed by investment experts/broking houses/rating agencies on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.

To read the full report click on the attachment

Read More