Dolat Capital Market's research report on Marico
Marico’s Q3FY21 revenues and EBITDA exceed, but APAT came in line with our estimates. India business posted 18% revenue growth with 15% volume increase. VAHO reported 21% value and volume growth – double digit volume growth after ten consecutive quarters. Sustainability of double digit growth would be key for margin performance, going ahead. Saffola continues to outperform with 26/17% value/volume growth. Consumer up-stocking helped the brand to post better growth during the quarter. GM contracted 220bps during the quarter due to sharp increase in copra prices. The company has implemented 5% price hike to mitigate inflation. We believe that the growth in Saffola would normalize here on, while VAHO is expected to improve on favorable base.
We have tweaked our FY21/22/23E EPS estimates at Rs 9.2/9.8/10.4 respectively to factor in Q3 performance. Valuing the stock at 43x FY23E EPS to arrive at a TP of Rs 440. Maintain Accumulate.