Dolat Capital Market's research report on Marico
Marico’s Q2FY21 revenues and EBITDA came in line, but APAT exceeded our estimates. India business posted 8% revenue growth with 11% volume increase. Barring VAHO (+4%), Parachute (+10%) and Saffola (+20%) reported double digit volume growths, was encouraging. Saffola continues to outperform with 16/20% value/volume growth. Consumer up-stocking helped the brand to post better growth during the quarter. GM contracted 160bps due to during the quarter due to 11% YoY increase in copra prices. Going ahead, copra prices are likely to remain firm in the near term, would have impact on GM. We believe that the growth in Saffola would normalize here on, while VAHO is expected to improve on favorable base.
We have revised our FY21E and FY22E EPS estimates at Rs 9.3 and Rs 9.6 respectively and introduced FY23E EPS at Rs 10.2. Valuing the stock at 38x FY23E EPS to arrive at a TP of Rs 388. Maintain Accumulate.
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